Jay Chen is a Venture Partner at Confihealth Venture Labs (CVL), a venture and innovation collective that services venture capital and corporate innovation communities. CVL sets its focus on the intersection of AI and Medtech innovations. Jay co-founded two digital health companies in his career. He is active in the venture capital investment community. Most recently, he served as a Venture Advisor for ZZ Ventures, a San Francisco based late stage VC firm. In his spare time, Jay has been a Healthcare Leadership Training Consultant where he work in partnership with Kaiser Permanente, UC Davis Health, Stanford Healthcare, UCSF Health, and the Cleveland Clinic, nurturing the next generation of healthcare executives. Jay is passionate about social and technology innovations that positively impact health, wellness, and the environment.
Q: What’s one professional skill you’re currently working on?
Jay Chen: I’ve been spending time working on the applications of artificial intelligence (AI). My personal view is that AI will bring a revolution around us. It will be changing business in the way that cloud-computing did 10 – 15 years ago. Many companies are struggling to figure out what AI really means. I spend some of my professional time learning about AI and machine learning. There are so many layers to the work and I think the only way to really learn about these concepts is to get your hands dirty to understand the implications for products and businesses.
On the venture side, we often look at companies that come with an AI or machine learning theme in their products, but we see that they might not really understand what those themes mean. Meaningful AI powered products can take an incredible level of resources. Often, companies don’t have the subject matter expertise to build these products, yet we consistently see CEOs or CTOs including AI and machine learning in their pitch decks. It’s become a highly inflated fleet in the startup and VC world. In trying to identify the high-quality companies out there who truly understand these concepts and have a unique offering, it’s clear that such companies are few and far between. However, the industry is moving to an interesting stage right now; some of the very resourceful companies (Google, IBM, Microsoft, Amazon and some VC backed companies) have made AI/machine learning part of their core offerings to the technology community, so when most companies include AI and machine learning terms in their development plans, they’re really talking about leveraging commercially available AI/machine learning tools. We need to understand that building solid AI enabled products are nontrivial.
Q: What behavior or personality trait do you most attribute your success to, and why? [Shaped your career]
JC: Being exposed to different parts of the world has really helped me to have a perspective on understanding the current state and future state of society. Here’s an example: when my wife and I had our first child, we made a point to raise our child as a global citizen, without the limitations of a national boundary. Think about the bigger picture and why we’re doing the things we do, and about who we are as human beings. I am fortunate enough to have grown up in Asia and came to the US as a teen, which allows me to expose to both Silicon Valley technology companies as well as Asian tech companies, especially those in the China market. Those experiences have enabled me to have a balanced world view. I hope the next generation of successful entrepreneurs continue to leverage their global perspective in building their companies.
Q: What’s a mistake you made early on in your career, and what did you learn from it?
JC: I came from a traditional path of technical engineering background working in a corporate setting, and then I started to transition into a more entrepreneurial journey. I learned from a mistake I made while working at a startup for the first time. We were so focused on the product and technology; we were the typical “work out of our garage” type of team with our heads down trying to build something, which is still a common attitude for startups. Once we had something built, we went out to find out who our customer was. I learned from a friend who later became a business partner that you need to put yourself in the customer’s shoes early on. You want to have potential customers lining up before the product is even ready. This customer-centric mentality changed my perspective for the better. Unless you’re working on a deep technology product, get yourself in front of a potential customer as soon as possible. In the venture universe, we see less than 10% companies built that deep technology, so most companies should be thinking about customers from the beginning. Build the customer pipeline before you even have a tangible product. It’ll help you down the road to save time, money, and to shorten the go-to-market cycle.
Q: What are some current trends in the digital health space?
JC: A couple of years ago, I gave a presentation about the digital health space and its transition into three phases. Phase one is the inclusion of active monitoring – monitoring heart rate, sleep, etc. Phase two is turning the active monitoring data into a diagnostics. Phase three is becoming therapeutic. Fewer companies can reach this third phase for a few reasons: it’s difficult to build these products, and the reimbursement models around these therapies are still unclear. These are the three phases I’ve seen in the past.
In the last 6 – 12 months, I’ve also noticed the increase of active monitoring applications in the deep clinical space. These are active monitoring applications that are not just monitoring your heart rate, but have more complex capabilities, like the ability to actively monitor a patient’s heart blood volume after a bypass surgery. This type of applications is fostering an active conversation and filling the gap between a patient and their care providers. There’s often a missing link between someone who had a serious medical condition or procedure, and someone on a clinical care team. The feedback touchpoint is limited – the care team can call you every week – but in between those communicative times, it’s hard for patients to have an accurate and real-time picture of their health state. I will give a couple more use cases: someone who underwent a hip replacement surgery can leverage these digital tools, and the patient’s post-surgery recovery progress can be monitored in real time. For someone in chemotherapy, these tools can be used to monitor how the patient’s body is reacting to the chemo and facilitate communications between the patient and their care team. I think there’s a strong value proposition for these deep clinical active monitoring and diagnostic tools.
Q: What’s something—big or small—that you’re great at?
JC: I had an opportunity to serve as the executive director of an influential Asian-American nonprofit venture platform in Silicon Valley. During that time, I learned a unique skill and it still influences me, which is motivating people. How do you motivate people? How do you help people to find their purpose? In the nonprofit world, the environment is very different compared to a for-profit domain. Incentive models in for-profits are straight forward; there’s a financial return that’s obvious. In a non-profit environment, most of your staff and volunteers are really coming together not for financial gain, but for a common purpose. They’re willing to give their time, money, and resources to build a common theme that usually has limited financial return. From that perspective, I learned how to motivate people and build a team. I’m good at helping teams identify a common value or purpose, which is crucial for any startup. Mathematically, a startup is not a very sound business investment – of course you hear of the “unicorn” companies who raised millions of dollars from venture funds – but if you look at the overall startup ecosystem, it’s a high risk and low return environment. You have a much lesser chance of getting a financial return than you do from working a corporate job. When you’re running a company, you will have very significant ups and downs. The teams that work together for a common purpose, are more likely to overcome those challenges, and they will build success. I enjoy supporting and guiding these companies along their journeys.
The Physician Innovation Network thanks Jay Chen for his involvement in the venture capitalist space, as well as his work in influencing the next generation of health care leadership.