05.26.15 – One typically drizzly Seattle morning a couple of months ago, Jeff LeBrun decided to check out a downtown place called the Cambia Grove that he’d read about in a local technology publication.
Since returning with his wife to their native Pacific Northwest from Ann Arbor, Mich., where he’d acquired an MBA and co-founded a successful company called Algal Scientific, LeBrun, 34, had been nursing a new entrepreneurial brainchild. With a principal collaborator — mobile software developer Chuks Onwuneme — a 3-D printer and two “real techie” associates, LeBrun was designing a “smart” medication container that would help patients adhere to doctors’ prescriptions more faithfully. Self-funded to this point, the team had been getting together in LeBrun’s basement, or Onwuneme’s home office, or temporarily borrowed spaces, or, of course, one of the region’s signature coffee shops.
They had a catchy name for their nascent enterprise: Pillsy. They had an imaginative product under development: a small pill bottle with a cap that would sync through a secure Bluetooth connection to a patient’s cellphone or tablet to track how many pills are being taken and how often, and to generate a reminder if a scheduled dose is forgotten. A trusted family member, friend or caretaker could check on prescription compliance as well. The device’s phone dashboard or the cap would even generate a refill order with a couple of distinctive taps. The app could pull up drug information and record a patient’s entire medication history.
The concept isn’t unique. In fact, a New York startup called AdhereTech is already testing a similar product. But LeBrun and his team think they have some new wrinkles, and there is certainly a need to fill. Studies indicate that up to half of all prescription drugs are taken incorrectly, accounting for 10 percent of all hospital admissions, some 125,000 deaths a year, a 9 percent failure rate among women using contraceptive pills “typically” (meaning forgetting to take one every now and then) — altogether adding an avoidable cost to the nation’s health care system of up to $289 billion a year.
So. They had a slogan: “Pill Management Made Easy.” They had a virtual marketplace presence: a website. But what they didn’t have was an established, comfortable, suitably wired up workplace to pull everything together.
That’s where the Cambia Grove came in.
A Destination for Health Care Entrepreneurs
Cambia Health Solutions, based in Portland, Ore., is a $4.7 billion umbrella organization whose subsidiaries include six health plans covering 2 million enrollees in four states (Regence BlueShield in Washington is among them) and 20 companies, all pursuing an explicit corporate goal of “transforming health care.”
In February, assisted by a grant from the Washington State Health Care Authority, four anchor partners — Cambia subsidiaries Regence and Qliance (a low-cost, 35,000-patient, concierge-like primary care service) and regional hospital systems EvergreenHealth and UW Medicine — opened the Cambia Grove at 9th and Olive, in the heart of Seattle.
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According to its website, the grove is designed to be a nonprofit “third place,” distinct from home or work — “a neutral ground,” where “entrepreneurs, investors, health plans, care providers, employers and innovators,” some of them even marketplace competitors, can individually team-build, strategize, create pilots and explore funding opportunities … or collectively mingle over coffee or after-hours beer and assemble more formally in workshops, classes, community meetings or scheduled networking events.
About two-thirds of the grove’s 9,000 square feet are devoted to “meet-up space,” says executive director Nicole Bell. The remainder is “traditional work space” — most of it open-plan, configurable and flexible, with soft seating, long shared tables where people can perch on stools in front of their laptops, small conversation pods along a bank of windows, free-flowing coffee — in many ways reminiscent of an airport VIP lounge.
“Increasingly,” says Bell, “new and established companies believe the design of a space allows the brain to realign the way you think and work. We’ve designed this place with the intention that users will feel it’s a safe harbor and a common table.”
The Cambia Grove is “not an accelerator, incubator or academic program,” its website makes clear. “You don’t have to trade your equity or IP [intellectual property] for access — although you might run into an investor or two looking for great, backable companies, or a customer looking for a unique solution. You come in with your ideas and you leave with your ideas.”
There are no membership dues or costs, but there is a catch. If you want to be welcome here, Bell notes, you will have to sign the “Cambia Grove Pledge.” It asserts, simply, “We are committed to transforming our health care system to be economically sustainable and centered on individuals and their families.”
At least one Seattle venture capital firm — Point B Capital — has been paying regular calls, notes Bell, to prospect among the growing number of health care startups whose brain trusts can be found interacting and intra-acting at the grove on any given day.
Meanwhile, each of the grove’s four anchor partners has committed to fund at least one new pilot project every year. That means, for the fortunate selectee, a first customer with a reputable name, early revenue, and an ideal test bed for feedback and product refinement. To choose a pilot to back, explains Bell, each partner will host a “reverse pitch” session in which, instead of listening to hopeful entrepreneurs tout their own inspirations, representatives of the larger institution will lay out for a national audience of innovators a priority list of problems in health care they most want to see fixed, and which seem best suited to entrepreneurial solutions.
Following a “multihour listening and white-board brainstorming session,” says Bell, there will be a “60- to 90-day national callout for best-in-class innovators working on the chosen topic. Then we’ll bring back [a finalist] and begin prototyping.”
General headings of topics likely to be addressed, she suggests, are technological and digital approaches to enhancing data interoperability, engaging patients, improving palliative care, connecting mental health with traditional medical care, and coordinating care for complex chronic conditions. First up at the reverse-pitch podium will be Kirkland, Wash.-based EvergreenHealth.
“We believe we have a latent health care cluster here in Washington State,” explains Bell, “with a dynamic mix of providers, insurance companies and Fortune 500 businesses that should be able to foster a robust and self-sustaining startup culture. We hope to make Seattle a destination for health care entrepreneurs, and we’re kick-starting that effort with a visible place and a strategy to go along with it.”
The Cambia Grove, attests Pillsy’s LeBrun, “is a great resource. It’s a beautiful space. It’s enabled us to come together as a team at a pretty early stage for a company. It’s helped us save cash we’d prefer to be spending on the development of the product, and to have productive conversations with other people who share the same goals. It’s been a godsend to us. It makes us professional at a pretty early stage.”
Progress and Traction
LeBrun was already attuned to the value of startup incubators. He and two University of Michigan PhDs — biologist Geoff Horst and chemical engineer Robert Levine — tuned Algal Scientific’s products for target markets in a small wet lab at the Michigan Life Science and Innovation Center, a former Pfizer research structure in Plymouth, Mich., that had been repurposed as a nonprofit health care, life sciences and biotechnology business hatchery.
The map of the United States is dotted with such facilities. There’s the Fogarty Institute in Mountain View, Calif.; SPARK in Ann Arbor; CIC in Cambridge, Mass … . They provide some or all of a package of essential services for startups, including office and laboratory space; support infrastructure and business development guidance; and grants, loans and seed capital aimed at encouraging entrepreneurs to commercialize their visions for the benefit of the local economy.
Most, however, ask some quid pro quo from their protégés — a piece of the action when a product is successfully commercialized in return for the early-stage mentorship, loans and seed investments, and usually a monthly space rental and membership fee. What’s more, only a few concentrate exclusively on health care technologies and services — “the entrepreneurial Mount Everest,” according to David Schonthal, clinical assistant professor of innovation and entrepreneurship at Northwestern University’s Kellogg School of Management in Evanston, Ill.
Regulatory constraints and the need to “design everything to be additive and complementary to the way physicians practice today” are among the reasons “timelines are much longer to get to market in health care,” explains Schonthal (who’s also a founding partner of the investment and advisory firm Fusion Ventures).
No metropolitan area in the country would seem to be better positioned to fertilize health care entrepreneurship than Chicagoland. It’s home to many health care-related associations; head offices of major pharmaceutical, marketing, education and health care publishing companies; Walgreen Co.; a bunch of teaching hospitals; universities … . Problem is, notes Schonthal, “There’s not a lot of density. We’re all spread out. The researcher at Abbott Park never bumps into the researcher at the University of Chicago or Argonne National Laboratory. Rarely do companies in the early stage line up with companies that are at a later stage. Young entrepreneurs burst out of the lab or the office with a new idea — ‘Ta-da!’ And then they’re surprised when people say they’re not really interested.”
Schonthal and an eclectic group of executives from Chicagoland’s venture capital, industrial and academic world have set out to change that. In February, in Chicago’s landmark Merchandise Mart — bankrolled by a $4 million grant from the state of Illinois and $4.4 million chipped in by 22 partners — they opened MATTER, a nonprofit health care technology startup center and community hub very much like the Cambia Grove.
Only different. The 83 startups so far signed up as members of MATTER, according to the website, pay $150 a month for the privilege. However, in addition to private and shared office space, open areas for demonstrations and meet-ups (25,000 square feet altogether), they also get access to wet labs, a 3-D printer, a kitchen to sustain all-nighters and a unique resource: a big simulated procedure room where proposed products and services can be tested against real-time medical office/hospital workflows and the evolving health care environment. The American Medical Association is popping for that video-equipped amenity.
“We’re expecting progress and traction,” observes Schonthal. “It’s not coincidental that we’re on the same floor as 1871” (a two-year-old nonprofit incubator and co-working space for digital entrepreneurs). “We expect they’ll bring something to the party. We’d like to see the two communities collide a bit.”
Nonprofit incubators “don’t stand alone,” pointed out University of Michigan School of Social Work professor Diane Kaplan Vinokur in a 1998 study. “They are understandably more deeply tied to the social, cultural and spiritual needs and development of their communities whom they serve. (This is as compared with their [for-profit] incubator counterparts, in which products may be developed for a more anonymous or national markets).”
To achieve the Triple Aim of “Healthcare 2.0” put forward by the Institute for Healthcare Improvement — optimizing the patient experience of care (including quality and satisfaction), improving the well-being of populations and reducing per capita cost — these kinds of groves matter.
David Ollier Weber is a principal of The Kila Springs Group in Placerville, Calif., and a regular contributor to H&HN Daily.