Munjal Shah, Founder, Health IQ
A health crisis that landed Munjal Shah in the ER turned out to be the catalyst for his next mission: making the world a healthier place.
On the day Munjal Shah started running a 10K race back in 2010, he was on top of the world. Just the day before, he had sold his company to Google, marking his second successful exit.
Then the chest pains started. Shah wound up in the ER, and while it didn’t end up being a heart attack, the incident was a sobering reminder that his own father had had one while in his 40s. It was a wake-up call for Shah, who was 37 at the time. He started focusing on his health, lost 40 pounds, and decided his next entrepreneurial endeavor would make the world a healthier place.
“People always say, ‘Go find your mission,’” Shah says. He’s now the founder of a new and growing insurance startup called Health IQ, which encourages healthy behavior by taking a data-driven approach to its coverage. “I would say my mission found me.”
The Big Data Company That Looks Like an Insurance Company
Health IQ provides cheaper life insurance rates for the health conscious, rewarding those who live healthily in the same way auto insurance rewards those who drive safely. It’s a simple concept. But to stop there would be to miss out on the true genius of Health IQ.
“I did not plan to set out to build an insurance company,” Shah says. To appreciate just what he means by that, let’s rewind.
After his health scare, all Shah knew was that he wanted to find a way to celebrate the health conscious. He is clear to distinguish, however, between the health conscious (those who actively choose things that are good for them) and the healthy (those who luck out and happen to not get sick). But he soon discovered that there was no way to measure that. No one had built a sort of FICO score for health—yet.
So he and his team wrote 30,000 questions designed to measure health consciousness, narrowed that list down to 3,000, and built the first Health IQ quiz. Through the use of display advertising, they were able to get millions to take that quiz. And what they found was significant: The mortality rates of those who had scored well on the test were 41 percent lower over the next three years than among those who had scored poorly.
But Health IQ had done something much more than simply figure out who’s less likely to die. It had created the world’s first dataset and mathematical framework that could be used to offer lower insurance rates to those who took care of their health.
“The dataset we created is one of the largest new mortality tables created in the last hundred years of insurance, and especially life insurance,” he explains. “But we didn’t even mean to do it. It just kind of happened by accident.”
Now, Shah is well aware of the causation-correlation conundrum. One could argue that the health conscious were naturally the people who did other things that happened to lower their mortality rates. But, he says, in insurance, the why doesn’t matter.
“Doesn’t matter why the vegans might die less,” he says, as an example. “If they die less, they should get a lower rate. Maybe it’s because they’re vegan, maybe it’s because they clean their house with less toxic cleaners, maybe it’s because they meditate. You don’t know exactly the connection of what’s causing what, but you do know that they die less, and so they should get a lower rate.”
That one quiz, taken by millions, sprouted into big data. “Health IQ at its core is really a big data company,” Shah says. “It looks like an insurance company. It looks like a company focused on kind of digital health. But really, at its core, it’s a big data company.”
That wasn’t the case right away, though. The Health IQ team sat on this data for three years trying to figure out what to do with it before realizing they could use it to save people money on insurance.
From there, Shah noticed a flawed system. Everyone seemed to be trying to get people to be more healthy by guilt tripping and nagging them. He decided Health IQ would take a markedly different approach.
“Look, if we celebrate the health conscious as heroes, maybe that will make more [people] health conscious,” he says. “In fact, maybe that will be more effective than making somebody feel bad about themselves.”
For now, Health IQ provides life insurance, but has plans to roll out health, disability, and other insurance in the future. The company has about 160 employees, compared to 60 one year ago, and Shah predicts it’ll grow to 300 one year from now. The last time he checked, Shah says Health IQ had done $7 billion of coverage in the last 25 months.
“I can see this one being my life’s work,” he says. “I can see working on this for the next 10 to 20 years.”
From Andale to Like.com: Shah’s First Two Exits
Before Shah was running a mission-driven startup aiming to make people healthier, he had to go “through hell and back” as he cut his teeth on his first startup, online auction management company Andale.
At 26, Shah had quit his job and moved back in with his parents to start his first business. He remembers lying in his old twin bed, staring up at a poster he’d had since high school of a “Lamborghini or some stupid thing,” and thinking, “I’m such a loser. I’m back in my twin bed in my parents’ room working on this startup.”
The timing was bad. Shortly after Andale launched in 1999, the dotcom bubble burst, and no one could get funding. Unless your company was already profitable, it was difficult to make it. Shah had to lay off 180 people.
“It was really a great lesson mostly in what not to do,” he says of his journey with Andale.
Eventually, Shaw grew the company back up to 200 people, most of them located in Bangalore. Andale was later acquired by Vendio, which was ultimately acquired by Chinese ecommerce giant Alibaba.
Almost immediately after that exit, Shah was back at it with a new venture. Like.com (previously called Riya) started as a tool for organizing your personal photos, but later pivoted to a shopping search engine that scanned your photos for objects and matched them to items you could buy online. It was later acquired by Google.
Both of these experiences taught Shah lessons he continues to draw upon as he runs Health IQ today.
Hiring in an Unconventional, Non-Scalable Way
One style of management that sets Shah apart from other founders can be observed in the way he hires new talent. He has some very particular team-building strategies that have worked well for him and his companies.
Shah Checks Every New Hire That Comes Through
As a company scales, the CEO typically steps back from the hiring process, leaving it to recruiters and managers. But not Shah. He interviews 95 percent of employees, often conducting their first on-site interviews. “I get to see what’s coming through the door,” he says. “And it takes enormous amounts of my time.”
If that seems to run counter to conventional startup wisdom, Shah actually learned it from a very respectable source—Google. When Shah was selling his second company to the search engine giant, he asked why they couldn’t just close the next day. The reason? Google co-founder Larry Page himself hadn’t signed off on it yet. That’s when Shah learned that Page signs off on every new employee.
“Every CEO coach, every board member, would be like, ‘That’s not scalable. You shouldn’t be doing that.’ And I realized, once I got inside … of any company I’ve seen its scale, it had the largest number of really talented and smart people.”
Shah saw a correlation here. Perhaps because Page checks every new hire—or maybe simply because everybody knows he’s going to check—the quality is notably higher.
“I realized, when you build a business, you really think about all the things that you want to build that will scale, but you should also think about the one or two things … where you want control to be more important than scalability.” In the case of tech companies, he says, a lot of the time, that’s hiring.
Forget Resumes. Shah Asks for ‘Brag Sheets’
If you ever apply for a job at Health IQ, you don’t need to worry about updating your resume—Shah doesn’t want to see it. Instead, he asks applicants to put together a “brag sheet” listing every accomplishment they’ve ever had.
“So if you won the spelling bee in the second grade, you put it on there,” he explains. “If you were captain of the track team, put it on there. If you were homecoming queen, put it on there. I don’t care what you won at. It can be anything.”
Why does he ask for this? Because winning, he says, is habitual. “The people that win keep winning. And resumes don’t tell you much about how well somebody did at something; it tells you what they were responsible for. And there’s so much success by association.”
How many times have you oohed and ahhed over someone because they worked at Google, Facebook, or Uber? That’s exactly the problem, according to Shah.
“But what did you do at those places?” he asks. “Maybe it was such a rising tide that that person could have done nothing, or they could have even been negative. And yet you’re kind of attributing to them all the credit. ‘Oh, they went to Stanford. They must be smart.’ Okay, maybe, but all through life, a ton of us use success by association as our primary argument, and this brag sheet kind of gets around that.”
How to Filter Out the ‘Fair-Weather Fans’
Most of Health IQ’s employees have experienced health crises themselves, and it’s no accident.
“That’s what we wanted,” Shah says. “We wanted a shared journey, a shared mission.”
At age 40, Health IQ’s COO Gaurav Suri’s cholesterol and blood sugar levels were so high he was prescribed statins, an often lifelong medication. Suri made lifestyle changes and lost 50 pounds.
After suffering a weight-related injury, co-founder Brett Cooper ate the same things for breakfast, lunch, and dinner for a year until he lost 120 pounds.
While not every employee has to have gone through a drastic lifestyle change, Shah is careful to weed out applicants who are only hoping to strike it big with a popular startup.
“You can always hire people who want to join a startup that’s raising $80 million and has Andreessen funding,” Shah says, referring to Andreessen Horowitz, the famous Silicon Valley venture capital firm that’s invested in companies such as Facebook and Airbnb. “But I try to not get what I call the fair-weather fans, the people who are like, ‘Oh, let me look at Andreessen’s homepage and see who they funded and let me apply to those companies.’”
How does he avoid that? Well, for years, he didn’t announce Health IQ’s financing—yet another unconventional tactic. While many startups are quick to hope for a TechCrunch write-up on their latest big-name investors, Shah kept it under wraps for as long as he possibly could.
New investors would ask him if they were going to do PR around the fact that they invested. Shah’s answer? Nope. And when they asked him why not, he replied: “Because I want people to think we’re a tiny little startup that’s only raised $5 million, and then they want to work here. And then I know they’re not fair-weather fans.’”
Eventually, Shah had to announce his funding as a way to prove Health IQ’s credibility. Its customers have to call in and report their income, net worth, and social security numbers, after all. “And a few good, credible news outlets pointing to you saying, ‘Yes, this is a real company,’ actually does help to make people more comfortable in doing business with you,” Shah says.
VC Funding and ‘Down Rounds’
Right out of the gate, Health IQ raised a seed round of $5 million. Later, it raised $75 million more. With that track record, would Shah ever consider self-funding?
“You know, I’ve always believed that the types of businesses that can be built off self-funding are usually more small businesses than large businesses,” he says. “And you can fund it that way, and that’s perfectly fine.” But he points out that almost all of the large, successful companies end up taking funding because they need to outpace the competition to grow quickly, and that usually requires venture capital.
The one piece of advice he’d give to founders who want to raise a round of financing? Never have a down round, which happens when your company has a lower valuation than the previous round. That crushes employee and investor morale.
“Don’t fund your company even at the perfect price or at the top of the current market,” he advises. “Try to fund it actually at the bottom, so that even if there is a correction, you don’t have a down round.”
How to Not Fail: The Secret to Munjal Shah’s Track Record
So let’s recap Shah’s entrepreneurial journey: He sold his first company Andale, and his second company Like.com. Now he’s working on Health IQ, which has raised $80 million with investors such as the legendary Andreessen Horowitz. Is Shah one of those rare serial entrepreneurs who has never had a failed company? Other than a few business ideas in college that never got off the ground, yes, he is. So you’re probably wondering, how did he do it?
“You gotta be lucky,” Shah admits. “And everybody says that, but that’s not very actionable. When you hear that, you’re like, ‘What am I gonna do with that?’”
To get a little more concrete, Shah says you need to be more interested in being successful than being right. If you start with a thesis, but the market tells you it’s wrong, be willing to listen. But just as important is knowing whom to listen to.
“If investors tell me something’s a bad idea, honestly, I ignore it,” Shah says. “But if customers tell me it’s a bad idea, I definitely pay attention and try to change what we’re doing.”
Two of Shah’s businesses are proof of this. Like.com pivoted after feedback from customers. Health IQ never had any intentions of creating a quiz. But when they did, and Shah saw that thousands of people took the quiz without any promotion, he knew they were onto something.
“You could say both Like and Health IQ actually had a version of itself that failed,” Shah points out. “But we just happened to pivot the company while we still had enough cash.”
That brings us to Shah’s next tip: Don’t wait till it’s too late to pivot.
“Everybody pivots their company when they’re down to one month of cash,” he says. “Everybody faces reality—it’s just too late. You’ve got to do it when you have a lot of cash.”
Promoting a Healthy Lifestyle in Workaholic Silicon Valley
Based in Mountain View, Calif., Health IQ is smack dab in the middle of Silicon Valley, a world of its own known for 80-hour workweeks, all-nighters, and doing whatever it takes to get your startup off the ground. Does Health IQ’s message fit in with the startup crowd? Shah says that, actually, startup people are exactly the type of people who excel at being health conscious, with the right encouragement.
“Remember, the startup person, psychologically, is the person who’s willing to give up the present for the future,” he says. “They’re good at deferred gratification.” They’re the ones willing to forgo a paycheck today in order to get a bigger one later. But sometimes it can backfire in regards to health if they decide, for example, to eat pizza every night for now and take care of their health later.
To make things easier on his own employees, Health IQ offers staff midday fitness classes, provides healthy food and snack options, and encourages work-life balance, according to its website. That sort of support reflects a nationwide trend happening around workplace wellness, which employers are embracing in hopes of improving retention while helping to lower costs and improve productivity.
Workplace wellness can be a delicate balance, however, when it comes to being welcoming and tolerant of all employees. Even at a place like Health IQ, this has been a challenge. The company previously had a ban on junk food in the office, but a tweet earlier this year by prominent developer David Heinemeier Hansson set off pushback that led them to dial it back. Shaw told CNBC that as a result, he would be putting more thought into the nuances of healthy workplace policies.
Shah’s Top Health Tips for Busy Entrepreneurs
As entrepreneurs, we have neverending to-do lists and never enough time to hit the gym or go for a run. There’s some good news, though. According to Shah, the number one thing to focus on is nutrition. “You can’t out-exercise a bad diet—no matter what,” he says. “And [nutrition’s] not even that hard.” Here are his top tips for cleaning up your diet.
- Make it a priority. As an entrepreneur, what are your priorities right now? You’ll probably say something like, “Meet with potential investors this week,” or “Get my first 1,000 customers.” But what about eating healthy? Shah points out that while we complain we have no time to cook or pick up a wholesome meal, there are plenty of options that save time, such as Uber Eats. “These days, you pull out your phone and, like, three clicks later, dinner’s on the way,” he says.
- Don’t drink your calories. This may be bad news for Soylent lovers, but Shah recommends never consuming calories via liquid. “If you really want to drink alcohol, do that, but don’t drink too much. But no juice, no milk.”
- Don’t eat high-sugar foods, and cut back on rice and bread. “There’s no good bread,” Shah says. “Even a whole wheat, whole grain, and you name it, every one of ’em spikes your blood sugar.” Shah should know. He once wore a continuous glucose monitor for an entire month and was able to watch his blood sugar spike in real-time. “It was fascinating.”
- The journey that led to two successful exits (one was with Google)
- The unconventional, non-scalable hiring methods that led Shah to build A-player teams
- How Shah discovered his mission and how this fuels his startup’s success
- Shah’s top advice for founders looking to raise a round of financing
- When and how to pivot: the key to Shah’s successful track record
- Shah’s top tips for busy entrepreneurs (it has nothing to do with meetings, investors, or customers)
Full Transcript of Podcast with Munjal Shah
Nathan: The first question I ask everyone that comes on is, how did you get your job?
Munjal: How did I get my job? So, you know sometimes in life people always say, “Go find your mission.” And I would say my mission found me. I was running a 10K race after I sold my last company to Google, I ended up with chest pains, and ended up in the ER.
This race was literally the next day after we sold the company. And, you know, it didn’t end up being a heart attack, but my father had his first heart attack in his mid-40s, and I was 37 at the time. And I ended up just realizing that my next…you know, I can change my health, lost 40 pounds from that wakeup call, but realized that, you know, I really found this interesting, and I really wanted to have my next startup be something that would improve the world’s health.
And so, I always say I kind of made it, this job found me, I was just running a race one day.
Nathan: Yeah, wow, that’s an incredible story man, that’s very powerful. Like, that due to your health, something happened and, you know, here we are. So, can you tell us around, like, the company that you sold to Google, can you tell us around that, and was that your first company or you said you’ve been a serial entrepreneur your whole life, or?
Munjal: Pretty much most of my adult life. So, you know, I started my first company in 1999, went through hell and back honestly. We grew the company to 200 people, I had to lay off everybody, but 20 people. We eventually grew back up to 200 people with 180 in Bangalore, riding the outsourcing wave of the early 2000s, and then through kind of a complicated exit, eventually sold it to Alibaba.
And then my second company was like.com. And that was the company that we pivoted and completely changed kind of its focus from its initial area to a different area, and then sold that to Google. And so yeah, I’ve always been a serial entrepreneur. You know, my prior two companies were more e-commerce focused, and I would say were just because I thought they were interesting, good businesses in areas I was interested in versus this one is kind of…I can see this one being my life’s work, I can see working on this for the next 10 to 20 years, so it’s got a little different flavor than the other ones.
Nathan: Yeah, wow, interesting. So, one thing that shout out to me was that you built your first company. What was it called? What did it do? Just out of curiosity. And you said you had to lay off 180 people, basically. I’m really curious around that.
Munjal: So, it was a company called Andale, and it built tools for power sellers on eBay, and these kind of other online marketplaces, and we built the first kind of automation tools that helped you manage your inventory and keep track of your customers, and send them emails, and keep track of, you know…automate listing your items back on the market if they didn’t sell and things like that.
And, you know, built that company kind of in the first internet wave. And honestly, it was really a great lesson mostly in what not to do than it was a lesson in what to do. But, just learned how to build a company, learned how to grow one, learned how to build a team, learned how to eventually get it to kind of profitability, but just through a lot of hard work, and honestly a lot of pain and suffering over a five-year period.
And so that was my very first company. I started that I think when I was 26, and then we eventually sold that, then I almost immediately jumped into starting like.com right after that.
Nathan: And how come you had to lay off that many people? Was it during the dot-com boom?
Munjal: Because that was basically the dot-com bust shortly thereafter. So, it was 2001, 2002, kind of that timeframe, you know, when there was no more funding, you couldn’t get any more, and if you weren’t profitable you needed to get profitable very fast. You know, many of the lessons I learned there are things that I continue to use today which we can talk about is kind of how to build a company and how to scale a company.
But, you know, that was a formative period in kind of how I think about building and growing companies.
Nathan: Yeah, wow. So, let’s kind of talk about Health IQ, and how this has started, and then, yeah, if you could talk about some of those lessons that you’ve learned, I think that would be really vibrant, how you’re scaling this company as well.
Munjal: Yeah, so Health IQ’s focus is to really provide cheaper insurance for health-conscious people. So, we have this very upside-down idea that… you know, after I changed my own health I realized, “You know what, I want to get the world healthier, but the way everybody’s going about it is wrong.” They’re kind of harassing the people who don’t care about their health and hoping they can convince then to care.
And I said, “What if instead you just celebrate the people who do care, and use this kind of aspirational, positive paradigm to kind of inspire others?” And that’s what we did, and we said, “Well, the way we want to celebrate them is with cheaper rates in life insurance,” which is where we’re focused at today. But in the future we’ll also be rolling that out for health insurance and disability, and other forms of insurance.
But, you know, the basis of the company is really this idea that there’s this group that really takes care of their health well, and as a result, deserves to be charged less, the same way good drivers deserve to be charged less, you know, in auto insurance, and so, that’s the very simple premise for the company.
We ended up starting it kind of backwards. So I did not plan to set out to build an insurance company. After my health crisis I said, “You know what, I just want to build a way to celebrate the people who take care of their health, the health-conscious,” not even just the healthy, because you can be lucky and be healthy, and you can be unlucky and be unhealthy, but just the part of health everybody controls, which is kind of how much responsibility have you taken, kind of your level of health consciousness.
And we found there was no way to do that. There was no way to measure it. Nobody had built kind of a FICO score for health consciousness. And so, we built the first quiz, we wrote 30,000 questions, we found the 3,000 questions that mattered the most, and we got millions of people to take the Health IQ test as we called it. And then what we found was that people who scored well actually had a lower mortality rate, had a lower what’s called morbidity rate or basically number of kind of hospitalizations they had.
And that just being health-conscious alone seemed to make…you know, kind of result in better outcomes. And now, one could argue correlation, causation, maybe all the health-conscious people were naturally the people who did other great things. Yeah, you don’t always know. In insurance though you don’t really care, it doesn’t matter why the vegans might die less, if they die less they should get a lower rate.
Maybe it’s because they’re vegan, maybe it’s because they clean their house with less toxic cleaners, maybe it’s because they meditate. You don’t know exactly the connection of what’s causing what, but you do know that they die less and so they should get a lower rate. So, we built the company basically using… so, that quiz effectively became the big data. Like Health IQ at it’s core is really a big data company.
It looks like an insurance company, it looks like a company focused on kind of digital health, but really at its core it’s a big data company that happened to build this dataset that mathematically shows and proves that health-conscious people, you know, have a lower mortality, and then uses that to give them lower rates using, you know, what’s called an actuarial model, which is basically a risk model.
And so, that’s what we did, we stumbled into by accident. So, we built that quiz, millions took it. We waited two years, three years while we were trying to figure out what the business model was behind the company, we were like seven people in a room for two years just kind of like, “Oh well, what are we going to do with this? We got a lot of people who took this, but how is this a business exactly? And how do we make the world’s health get better?”
And then one day we stumbled in and realized, “Oh wait, we could really use this to create the mathematical framework for lower rates, and use that to save people money.” And saving money on insurance is something people like, and especially because it’s something they did.
Nathan: And in turn obviously, encourage more people to be health conscious.
Munjal: Exactly. So, that’s exactly right. You know, this is the aspirational element of the company, which is, “Look, if we celebrate the health-conscious as heroes, you know, maybe that will make more health conscious.” In fact, maybe that will be more effective than making somebody feel bad about themselves and saying, “You know, you should really get off the couch and take care of your health, otherwise something could happen to you.”
I mean, you know, that’s… seems like it can be effective short-term, but if you look at the data, 99% of the time that person is back on the couch within 6 months. And we just think the world is probably a better place if we try the other approach.
Nathan: So, tell me, you said one thing that strikes out to me is you said you got millions of people to take it in two years. Were you bootstrapped at this point, because you’re now backed, you’ve raised…I’m told that you guys have raised, you know, over 80 million in VC funding. You have some great investors like Andreessen Horowitz.
Back then did you…like how did you get millions of people to take the quiz? Was that for funding or?
Munjal: So, we had raised an initial seed of $5 million. So, $3 million equity and $2 million debt right out of the gate. So, this was an advantage of having sold the last company, it did make that initial funding a little easier, where there were some folks who had, you know, honestly made money with us before, and were willing to kind of give us a shot even though things were not fully defined yet.
And so, you know, when you play the game a second time or third time, you don’t always start at the same place. You get a little bit of an advantage. But you know that only really works for one round, like if you don’t have a business after that, you’re not going to get the second round of financing based upon your track record, like they’re going to look at the business and they’re going to look at how well it’s doing, and that’s exactly what happened in the second round.
You know they were like, “Oh well, have you figured this out? Like what’s the business? How are you going to make money? Like is there a business model here?” And, you know, they were like, “Well, it doesn’t matter who you are or what you’ve done before, if you don’t have those answers you’re not going to get the next round of financing.” But fortunately, by then we had figured out how to convert really this data into a product around cheaper insurance.
Nathan: I see. And when it comes to getting those millions of customers, did you just use PPC, paid acquisition?
Munjal: No, very little search, we actually used mostly display advertising. We ran ads all over the internet that just said, “Hey, come get your health IQ.” You should know your health IQ, like you know your FICO score, how come you don’t know your health IQ? Like it’s more important in many ways, and, you know, your health is a very important part of living a great life.
And so, lots of people were like, “Yeah, I want to know now.” Mind you, I think a lot of people who wanted to know their health IQ had good health IQ.
Munjal: Kind of one of these self-fulfilling things, like if you think your health IQ is bad you really don’t want to know. But, you know, this brought really the health-conscious to us, and they took the quiz, and when we built the dataset out of it. And the data showed that the health conscious actually died 41% less over the next 3 years than those who had scored poorly on the test. Like there was an actual significant mathematical difference.
Nathan: Yeah, that’s really interesting, I do see a lot of companies use quizzes as a form of lead generation, so… and I think it’s really smart from like a prequalification, like people essentially qualifying, like they’re qualifying themself if they’re a right fit from a sales standpoint.
So, I’m just curious, like a lot of those people that were health conscious that prequalified themself, the conversion rates must have been out of this world, in terms of people signing up for your, like, health insurance, right?
Munjal: Yeah, I mean it ended up being an effective distribution channel. Since then I’ve also found other channels that are honestly even more effective, but quizzes work, right? They do. They’re fun, people like taking them. But we also use the quizzes, not just as a lead generation tool, we use the quizzes really to build the dataset.
To really build the actuarial, statistical model that we use to price and get cheaper rates for the health-conscious. And so, that’s probably the biggest value of the…kind of the biggest legacy of the quiz is really that, look, we were just building a quiz, we had no idea that really the data coming out of that quiz would enable kind of…we basically created…the dataset we created is one of the largest new mortality tables created in the last 100 years of insurance and especially life insurance.
But we didn’t even mean to do it, it just kind of happened by accident.
Nathan: Yeah, wow. So talk to me around like traction so far of the company. You said that you’ve learned a lot of lessons from your past two companies that you’re taking to this one in terms of scaling and growing it. Talk to me around that, I’m really curious.
Munjal: Yeah, so the company has been growing quite a bit. We’ve probably done, I don’t know what it is right at this moment, but I know a few weeks ago we looked at it and we had done $7 billion of coverage in the last like 25 months. And so, you know, the scale is growing, we’re selling a lot of marathon runners and triathletes and vegans and vegetarians, and other health-conscious people on lower rate policies, and they’re saving a lot of money and they’re happy about that.
In terms of scaling the company, you know, we now have about 160 employees. We had about 60 employees a year ago, and we’ll probably have about 300 a year from today. And so, it’s scaling at a very fast clip. But you know, a couple of things I’ve done in this company are kind of from lessons from the past.
And one of them is, something kind of counterintuitive. Normally, as companies scale and they’re 150 people going to 300, the CEO is barely involved in hiring unless it’s an executive hire.
Munjal: And what I’ve done is kind of the opposite. I realized in my past companies that the day I walked away from hiring is the day I kind of felt things… that kind of like the quality threshold went down. And so, in this company we have…like every single employee, with a few exceptions, well I’d say 90%, 95% of employees I personally interview.
And not just at the end, I kind of interview during their first on-site interview.
Nathan: Yes, yeah.
Munjal: So, I get to see what’s coming through the door, I don’t just kind of get a pre-filter, you know, a curated list to kind of choose from. And it takes enormous amounts of my time, but it’s something that I learnt from watching…when Google was buying my company.
We had finished the M&A on a Wednesday, all the docs, and I said, “Hey, why can’t we close tomorrow?” And they said, “Well, Larry hasn’t signed off on your offer packets.” And I said, “Oh, he signs off on every M&A’s offer packets?” And they were like, “No, no. He signs off on every new employee, period. Every Thursday, all day.” And I was like, “That can’t…” And the company was like 12,000 people at the time, something like that.
And this is 2010, and I thought, “Oh my God, that’s very non-scalable.” Like every CEO coach, every board member would be like, “That’s not scalable, you shouldn’t be doing that.” And I realized, once I got inside, that Google was filled with, you know…of any company I’ve seen its scale, it had kind of the largest number of really talented and smart people.
And I said, “You know what, this might be because of this check.” Maybe it isn’t the check, maybe it’s just the fact that everybody knows he’s got a check that makes everybody kind of hire better. I mean, who knows? But it turned out that I realized when you build a business you really think about all the things that you want to build that will scale, but you should also think about the one or two things you want to have…where you want control to be more important than scalability.
And in the case of tech companies it’s a lot… you know, a lot of the time it’s hiring. In the case of…if you ran a furniture maker for, you know, cabinets in some other part of the country, maybe it’s, you know, looking at how the front of the drawers attach properly to the base, you know, to the box of the drawer, because that’s when things kind of seem to fall apart or, you know, I don’t know much about cabinets here.
But you understand. There’s probably a step that if you’re going to QA anything you should QA that step in the process. And that was something that I’ve carried to this day, is, you know, we’ve done a very different…there’s some other hiring things that we’ve done.
We actually don’t use…we look at people’s resumes, but we have them generate something called a brag sheet, which is a listing of every accomplishment they’ve ever had in their whole life. And so, if you won in the spelling bee in the second grade, you put it on there. If you were a captain on the track team, put it on there. If you were homecoming queen, put it on there.
Like I don’t care what you want to, it can be anything. It can be you were a champion of, you know, the track champion for your state. Like, we just found that there’s this…that winning is habitual, and the people that win keep winning, and resumes don’t tell you much about how well somebody did at something, it tells you what they were responsible for.
And there’s so much success by association, “Oh, I’m so good. I worked at Google, and then I worked at Facebook, and then I worked at Uber. And then I worked at,” you know, name your next kind of successful. And you’re like, “Wow, this guy is great, I should totally hire him.” But like, what did he do at those places? Like maybe it was such a rising tide that that person could have done nothing, or they could have even been negative, and yet you’re kind of attributing to them all the credit.
Or, you know, “They went to Stanford, they must be smart,” okay maybe. But all through life a ton of us use success by association as our primary argument, and this brag sheet kind of gets around that.
Nathan: Mmh, I love that.
Munjal: And so, we do it with every candidate. There’s actually not a single person that’s been hired here without a brag sheet. And we send them our brag sheets just to be fair. We’re like, “Look, here’s the brag sheets of you know 15, 20 people in the company, just A, to give you a sense of how to write it, and B, to, you know, kind of share our journey as well.” And so, you know, those are kind of the two hiring things I learned.
The other scaling thing I learned from 2002 was, there is nothing worse than a down round. When you grow your company everybody thinks, “Oh my God, I got such a great valuation. Let me try to get a higher valuation. Let me try to, you know, take the least dilution possible.” And I always tell entrepreneurs, you know, “Gosh, if you’ve ever been through a down round you know you can also price something way too high.”
And you think it’s all you, you think it’s you know, “Oh look, I’m the one raising all this money.” I said, “It’s not.” It’s maybe 20% you and your company, or maybe more than that. A significant part is the macro environment. There was a period after 9/11, there was a period after 2008, where even the best companies couldn’t get funded.
And so I said, just know that valuations follow the intrinsic value of a company, but also go up and down with kind of the macro environment. And don’t fund your company, even at the perfect price or at the top of the current market, try to fund it actually at the bottom so that even if there is a correction you don’t have a down round, because down rounds and even layoffs are just…you don’t realize how much wind is at your back when you’re building a company.
You know, the employees are working harder because things are going up. Their spouses are telling them, “Hey, go work harder.” You know, “This is great, we’re onto something here.” You know, the press is writing about you and saying how great your company is, which is making more people apply to want to join your company, which is making investors also excited and they want to invest in your company, which makes more competition there, which means higher valuations.
And then as soon as you spin the other way you have investors and board members that are suddenly feeling duped that they were the person who paid the highest price. You have employees that because of the layoffs you did, are like, “Argh, you know, this is going nowhere, maybe I should look for another job.” You have their spouses going, “Yeah, this company is going nowhere.Why are you going to work early?” You have press that’s writing about how awful your company is and you can do no right.
Before you could do no wrong, and now you can do no right. And so, just you don’t realize how much these things are successful because of the wind at your back. And when you end up with a down round you just…you know, the wind shifts and you end up with a gale force wind at the front. And that most entrepreneurs who have not been through several cycles don’t realize, you know, how much wind is actually pushing them along.
Nathan: I’m curious as well like when it comes to all of your companies, you’ve always raised VC. Have you ever considered, like especially with your latest company, Health IQ, perhaps self-funding?
Munjal: You know, I’ve always believed that the types of businesses that can be built off self-funding are usually more small businesses than large businesses. And you can fund it that way, and that’s perfectly fine. But if something can be self-funded, then lots of people can self-fund their way into that market, which means it’s a competitive market, which means it has low margins, which means it has low valuations.
And that almost all of your big, successful companies end up taking VC funding because the market window only opens for so long, and you kind of got to get as much gas and run through that window as fast as you can to kind of emerge at the right time in the right place. Another form of this I always here from people is, “You know, I don’t want to quit my job.I just want to work an idea on the side.”
I’m like, “Yeah, but you’re going to lose to the guy who quit his job. He’s working on this every single minute of every single day, and you’re working on it a few nights, few weekends, maybe every night, every weekend, it’s still not every single minute of every single day. And, so I always say you cannot build a business another way, it’s just that some of the big market opportunities, particularly in tech, just require you to move faster and beat the competition, and you need to gas and go to be able to do that.
And it can be very hard to do that without raising venture money.
Nathan: Yeah, that makes sense. And one thing you said was, you referred to “us” when you first started Health IQ. Does that mean that you took the same founding team from like.com when you exited to Google? Did a lot of your team when you exited to Google and were acquired start…
you know, your old crew come and help you build Health IQ, is that what you meant by that?
Munjal: Some, but not all. So, my co-founder and CEO Gaurav Suri was with me at Like, and also with me at Google, and he joined as well. But honestly, the team we put together for Health IQ were a group of people that all had gone through a health crisis themselves. That’s what we wanted.
We wanted a shared journey, a shared mission. So, Gaurav had his own health journey where he lost 40, 50 pounds, and had very severe migraines, had been in the hospital with spinal taps that…you know he had a very similar difficult journey. But then we found other co-founders who just shared the mission. So, Brett, one of our cofounders, lost 120 pounds, he was an ex-Google engineer who had written the original backend code for Gmail.
And one day just knew he had to change his health, and so he ate the same thing for breakfast, lunch and dinner for a year till he finished losing 120 pounds.
Nathan: What was that thing?
Munjal: It is what you’d expect, salmon and broccoli. At least for dinner, I don’t know what he ate. I don’t think he ate salmon every day, because if you do that I think you’ll probably get mercury poisoning. And then Chander lost 60 pounds and had such severe health issues before that that he had this kind of weird former narcolepsy where you just fall asleep in different places.
And, you know, so we had a group of people who had all had a similar journey, and that’s the group that we kind of pulled together to do this, because it creates a different kind of bond. You know, and I want to be respectful, Google had paid me a whole lot of money partly for the technology and partly for the team, and I didn’t want to, kind of disrupt the value that they had sought.
And in fact, most of our engineers and PhDs are still at Google to this day.
Nathan: So, when it comes to, I guess, the founding team, does that mean like all future hires have to go through some sort of health journey?
Munjal: No. I mean, actually we just looked at the stat, but probably about I think 65%of our employees have gone through a personal journey, and another, what was it? Further 15% didn’t have their own journey, but there was a family journey.
Munjal: You know, somebody in their family that was close to them had something. And another 20% didn’t have any journey necessarily but just maybe grew up health conscious their whole life, they just had a parent, or they just care about the mission. Yeah, you can always hire people who want to join a startup that’s raising $80 million and, you know, has Andreessen funding, but I try to not get kind of what I call the fair-weather fans, people who are sort of like, “Oh, let me look at Andreessen’s home page and see who they funded, and let me apply to those companies.”
I’m like, “Yeah, that person’s coming,” but, again, they’re coming because they think you’re going to be in the NBA finals. And you want the ones that didn’t know that were like, “Oh, I don’t know. Is this company like…” Actually, we didn’t announce any of our financings until just very recently. So, we announced the first 5 million, then we didn’t announce anything, and then we announced all of the financings in between, all the remaining 75 million all at once even though it had come over 3 rounds.
And then in the meeting period I didn’t announce it on purpose. And people were like, “Why aren’t you announcing your financing?” And the new investors would be like, “Are we going to do a PR around the fact that I invested?” And I’m like, “No.” And they were like, “Why not?” And I said, “Because I want people to think we’re a tiny, little startup that’s only raised $5 million,” and then they want to work here.
And then I know they’re not kind of fair-weather fans. Now, eventually we realized that we did need to announce it all, partly because when people apply for life insurance they have to call us up and they have to tell us their, you know, income and they have to tell us their net worth, and they have to give us their social security number, they’ll tell us their health history.
And sometimes when you see a website, and you’ve got to click on a link, and then you talk to somebody on the phone and you’re giving this information, you’re like, “Wait a minute. Who are these people again?” And a few good, credible news outlets pointing to you, saying, “Yes, this is a real company,”actually does help to make people more comfortable in doing business with you. So, we finally did it, but we waited, honestly, years, and just announced nothing, we did no PR for several years in there.
Nathan: Yeah, wow. So, one thing I’m also curious around is, do you think that as founders, just like kind of you said about your founding team, we just forget about our health and we just focus on growing our companies because it’s just an obsession?
And it’s easy to forget? Especially, this is a problem, you think, in San Fran, Silicon Valley?
Munjal: You know, I think it’s gotten better now than it was when I first started doing startups. But yeah. Remember, the startup person, psychologically, is the person who is willing to give up the present for the future, they’re good at deferred gratification. On one hand that makes them kind of say, “Hey, you know what, I don’t have to get paid as much today because I want to get paid a whole lot more, I want to change the world later.”
But on the other hand it leads them to, “Well, I’m going to defer taking care of my health too. I’m going to kick the can down the road, and I’m just going to eat pizza every night.” You know the number of startups that you go to where they’re serving pizza, even the health startups and there’s like…I walk in and they’re serving pizza, and I’m like, “What? Like what are you doing?You’re a health startup.”
And so, like for example, here at Health IQ, we have no soda, no granola bars, no candy bars, no sugar in the office. We have nuts and things like that. We allow you to keep it at your desk if you really want, but we don’t…nothing could be in the common areas, and even at your desk it’s not terribly encouraged. And it’s not even about your self-control, it’s that if it’s a poor environment everybody’s going to get tempted.
And so anyways, at many startups people don’t, I didn’t. I just said, “Oh, whatever. I’m busy running a company, leave me alone, stop harassing me about my health.” And finally one day I kind of had a scare that made me realize, “You know what, I can’t do this, I have to take care of this now. I have two young kids and this is something I have to address today.”
Nathan: So, what did you do? Like how did you change your lifestyle? And is it easy? Would you recommend for founders like, a lot of people listening to this interview who will have just started their company just…? You know one thing that Steve Blank said to me, I said,” If you want to build…”I said to Steve Blank, I said, “If you want to build an eight or a nine-figure business, like what kind of hours are you expected to work?”
And he said, “You’ve got to be working 80 to 100 hours if you want to do stuff like that.” I’ll never forget that. This was a while ago when I spoke to him as well. And I know, I think it’s easy to forget, but it is also easy to make those adjustments like around just, you know, preparing your meals for the week, booking in if you can afford it, to have some sort of personal trainer, or even just having a friend that you meet at the gym and you go there four, five times a week, you know like…It is only a slight adjustment, you know what I mean, like it isn’t too much to ask.
I’m trying to be quite health conscious, I have for most of my life. But yeah, I did let myself go…
Munjal: Good for you.
Nathan: I did let myself go over the past few years, and I’m boxing now, and I’ve actually lost quite a bit of weight.
Nathan: Yeah, thanks. So, yeah I’m curious.
Munjal: You’re exactly the person we want to celebrate, who’s really taking control of their health. And obviously we’re those same people, you know, this is a company I’m making for people like myself, and people like yourself. And so, but yeah you know it’s, look number one thing I’ll tell you, it’s nutrition.
Like you can’t out-exercise a bad diet no matter what. And it’s not even that hard nutrition, just cut out things with heavy added sugar. Don’t drink a calorie I call it. Any form of liquid calories try to avoid. If you really want to drink alcohol, do that, but don’t drink too much. But no juice, no milk. You know as Arnold Schwarzenegger said when they interviewed him, when he was you know competing for Mr.
Olympia, this is like the 70s, “Arnold, do you drink milk to get strong?” He’s like, “Milk is for babies.” And so, it just spikes your blood sugar. And so, don’t drink a calorie, don’t eat the high-sugar stuff. And then the last one is just cut down on your bread and rice.
And I actually wore a continuous glucose meter to watch my blood sugar for a month. And you know what, there’s no good bread, even a whole wheat and whole grain, and you name it, every one of them spikes your blood sugar. Like I literally wore something that you know every minute took a sample of my blood sugar and just let me real-time watch what was happening, and I mean it was fascinating.
And I’m not diabetic, I just wanted to see kind of cause and effect. But anyway, the first is diet. Second, exercise. But, you know, there’s a lot of science now that shows that high intensity interval training. You don’t have to work out for a long time, you just have to work out really intensely. And if you do those sorts or workouts it actually creates a metabolic change in your body, which makes you lose weight, and boxing obviously is that kind of a workout.
Because it’s like sprinting with your arms, you box, box, box, box, box, and then you got to rest for a second, right? And so, you know those are two things. And people say, “I don’t have time to work out, and that’s why I’m out of shape.” And I’m like, “You know what, it takes like one second, not even one second more to order X versus Y. What does that have to do with time?” It doesn’t at all.
And these days with Uber Eats all the things they can just deliver, you can be like reminiscing the old days you were like, “Oh, I’m stuck,” and, “I got to get in the car, and I got to drive to a restaurant, I got to get the food, and I got to come back.” You know, these days like you pull out your phone and like three clicks later, dinner is on the way. And people are like, “Oh, I don’t have the money.” We make a lot of prioritization decisions in our lives, and so you can just decide whether you want to eat healthy or you want to have a $1,000 iPhone.
It’s kind of one of these things, you’re like, “I don’t have any money.” I’m like, “Yeah, but is that an iPhone X in your hand? Because I think it is.” So, you’ve just got to make it a priority and kind of…the second thing, though, I have seen, though, entrepreneurs tend to be very good at self-control, and so once they decide to prioritize this, the number of entrepreneurs I know who take care of their health really well is actually quite high.
They just don’t put it on the radar, but once it’s on their radar, they’re usually really disciplined and usually even a bit maniacal, like they end up becoming the triathletes and the guys doing 50-mile races and 100-mile races. Like almost all the ones I know who do that are entrepreneurs, and they just have that much self-control and discipline.
Nathan: Because, I think entrepreneurship or building a business is a competitive sport. And when you kind of focus and put your mind to something you just attack it, and you want to win, right? I don’t know if that’s like the same for most people, but do you know what I mean?
Munjal: It’s that. And I think that there’s a high relationship between entrepreneurs and endurance athletes, because in many startups you don’t have a competitor yet. It’s kind of you against you. And there’s not somebody you can benchmark yourself against, there’s not somebody you can look at, there’s not a market share report coming out every month on how your sales did compared to somebody else.
You’re coming up with a whole new idea nobody’s come up with, and maybe nobody else is even trying because it might not even be a good idea. And endurance sports are similar. It’s kind of man against mind, or woman against mind. And entrepreneurship, I think, is more akin to endurance sports than it is to team sports especially in the early days.
Nathan: Yeah. Well look, we have to work towards wrapping up, Munjal. So, a couple of last questions. One thing that kind of shouted out to me is you said you’ve started now three companies, serial entrepreneur. Have you failed? Have any of your companies…have you sold any companies that have failed that you haven’t mentioned?
Munjal: Not really. I mean, there was a bunch I remember in college we tried to get going, and we kind of never got it even past the formation stage. I actually remember three or four times, trying to kind of like, “Okay, let’s all start this company and quit our jobs or work on it on the side in college,” and we just never started. But, you know, I would say there’s been varying degrees.
Like my first one was okay, but not the biggest hit in the world here, like.com turned out much better and Health IQ is doing well. But, you know, it’s not uncommon I think when I see all the stories out there. You know, I’ve probably invested in 30 companies, I’ve been on the board of about 10 just to kind of see like it’s…you know, I would say this to most entrepreneurs, everybody thinks if your startup fails then you probably will never be successful again.
And I’d say, it’s like any other sport, the more you do it the better you get at it. And when you look at the core stories of a lot of people, their first startups kind of didn’t go well. I was reading Elon Musk saying that he had his first company that wasn’t all that great, and then eventually started Zip2. Like everybody’s got to kind of cut their teeth somewhere, and learn, and then later on you kind of figure out the formula.
Nathan: But you’ve got a really good track record man, like you sold your first company to Alibaba, second to Google, now that we have Health IQ… Where I’m going with this is, is that’s a pretty amazing track record, and on top of the fact that…I don’t know if this study is true, I would challenge this study, how they say that 90% of businesses fail in the first 5 years.
So, that’s a pretty amazing track record, it’s difficult to even exit a company, you know what I mean. So, why do you think that is, like what is it about you as a founder, what are qualities, like what disciplines, what habits do you have that helps you?
Munjal: I would say the first thing is…I mean, A, the whole thing, you got to be lucky, and everybody says that. But that’s not very actionable. When you hear that you’re like, “What am I going to do with that?Go buy a rabbit’s foot?”
Like I mean, who knows, Peter will probably come after me these days for that. But, the…so, the actionable things are things like I believe you have to be more interested in being successful than in being right. That you always start with a thesis, and then the market tells you something about whether that thesis is right or wrong, and some people listen, and some people don’t.
And it’s a fine line, because if you listen too much you’re going to be bobbing and weaving all over the place. But you got to figure out who to listen to and who to not. So, if investors tell me something is a bad idea, honestly I ignore it. But if customers tell me it’s a bad idea, you know, I definitely pay attention and try to change what we’re doing. Like.com eventually was a shopping engine that used computer vision to search inside of photographs, looking at the color, shape and pattern of a dress or a handbag to find similar things.
But we started it out as a product to organize your personal photos. And while millions of people uploaded their photos, none of them came back, and I was looking at the statistics, and I’m like, “Oh, oh,” like, “We got a pivot.” But then literally a couple customers wrote in and said, “You know, I don’t really want to search my own photos that much, but if you could help me search the web and shop better I would really be excited.”
And that gave us the idea for what eventually became Like. And so, that was a case of, you know, kind of, do it. Even Health IQ we started out, we didn’t even think if we were going to make a quiz when we first raised that $5 million. We said, we were going to do a FICO score for health using blood tests. And then, we wrote a quiz one day, actually for new employees to take, and we put it out on our webpage, and then we looked one day and realized, “Oh my God, like 10,000 people have taken this quiz and we didn’t even promote it. People must really like quizzes.”
And that changed our mind. And then we thought, “Oh, we’ll get discounts in this kind of insurance and that kind,” and eventually we found life insurance. So, again we were just more interested in being successful than it being right. Our thesis in both of the companies changed. So, I mean, you might say that while on the surface it’s like, “Hey, these companies all went well,” you know, a pivot is the death of kind of the original thesis or the original idea.
You could say both Like and Health IQ actually had a version of itself that failed, but we just happened to kind of pivot the company while we still had enough cash. So, that’s the other key is, everybody pivots their company when they’re down to one month of cash. Everybody faces reality. It’s just too late.
You got to do it when you have a lot of cash and you have enough money to kind of be able to make it, you know turn the ship in time. So, that would be something that I know, I’ve spent a lot of time thinking about and doing. And I think the other one is just, you know, focus a lot on product/market fit.
People go, “Oh, you know we have a great team and we have a great this and we have great investors.” And I said, “You know what, you can do almost everything wrong if you have a really strong product/market fit, kind of things will be forgiven and you’ll still be successful. And if you do everything right but you don’t have a good product/market fit, you hire right, you get the right investors and you get the right operational team and all that, but the customers don’t really want it, like you can’t fix that.
And so, I would really, really focus on that product/market fit. We talk about all these other variables but nothing matters more than that.
Nathan: How do you know when you’ve found it?
Munjal: When people are kind of beating the door to you wanting whatever it is you’re selling or whatever service you’re providing. And you kind of can’t stop them, like they’re just coming and coming. And I’ll give an example of a company that I’m on the board of in Germany, called WhatsBroadcast.
And the company originally started building a news app that would help you kind of get personalized news. And then, just through some circumstance the CEO ended up getting a customer request for this idea of, could they deliver the news through WhatsApp, because in Germany 80% of people use WhatsApp, so 90% is like a very high penetration.
And so, he built that, and then he needed a tool for the marketers, the news organizations to kind of manage who’s subscribing and what news to send them, and personalizing the news they get, and this and that. So, he built basically a marketing automation tool for marketing through WhatsApp from businesses to consumers.
Munjal: And then he pitched it, he said, “You know, I pitched it then to 20 different businesses, like, “Would you want a tool like this?” and he’s like, “In my whole career I’ve never had so many yeses.” And they weren’t kind of like, “Yeah, that’d be great. They were like, “Oh my God, can I have this tomorrow?” And I remember he came back to the board meeting, and he’s an old friend of mine, and he said, “I think we should pivot the whole company to this. I’ve never, ever, ever seen such a response to any product concept that I pitched to customers.”
And we pivoted the whole company, and it’s scaling and doing really well. Deutsche Telecom and Red Bull and a bunch of these guys are customers of the company, and it’s been scaling and scaling and scaling, because, you know, lots of companies want to manage their marketing automation for their customers on WhatsApp, and so especially in other countries outside the U.S.
And so, that’s a great example of just, you know…he just got that fit and now everything’s working because there’s just true demand for the product.
Nathan: Because it’s not just generating sales, and that sometimes I think sometimes is where people can get a little confused. If you’re generating sales and people are buying, some founders would assume that you’ve hit product/market fit.
Munjal: Yeah, you’re right. I mean, you almost need…if they’re buying but somebody else is selling the same thing and you’re just winning because you’re spending more on marketing than they are, that’s not a good answer. You have to have something different. Like if you look at Health IQ, we actually took that data, convinced carriers to give people special rates they can’t get anywhere else.
Like it’s not the same retail rate you’re going to get, if you are health conscious we’re going to get you a rate that nobody else can match because they didn’t have the data to figure out how to price it. And in insurance you can’t just lower your price, you’ve got to know exactly how much to lower it. You can’t lower it 20% and find out vegans only die 10%, you’ll still lose your shirt. And so, you know, they died 10% last year, you like, could still be in trouble, and so they… you need this kind of dataset to do it.
But the nice thing about life insurance is it’s a commodity, meaning there are no features, you don’t care if your doctor’s in the network, you don’t care if your prescription’s there, you’re just like, “What’s the coverage? What’s the amount? Is the carrier going to be there to pay?” And so, if you’re 10% cheaper for every marathoner, you don’t get 10%of the marathoners, like with enough marketing you kind of get them all, because why should any of them pay more? And so, it’s a very powerful value proposition, mostly because it’s the data that allows for that discount.
And so, you just…you’ve really got to get in there and really find that product/market fit, and make sure you have it. And sales alone is not enough. You’re very correct in that I think.
Nathan: Yeah. Okay, awesome. Well, look, final question, because I know we’re over time. Just one thing around the product/market fit, like back in the 90s did you know like to look for this when you were like building Andale, or like…? People never talked about this kind of stuff, like, the lean startup framework and methodology wasn’t out then.
Like were you that concerned with customer development back then?
Munjal: Kind of sort of. I mean, the way you just described it, you’re like, “Back in the dark ages…”It’s like, “Like back when I was a wee little boy.” What we did was, it was actually pretty interesting when we were working on ideas both for Andale and for like.com, we actually… time almost bid off multiple ideas against each other.
I knew that if you just worked on one startup idea or one product, you would invariably convince yourself it was a good product. And I remember when I started Andale, like I quit my job, I moved back in with my parents in San Jose, I was sleeping in my twin bed looking up at my old poster in my room that had been there since I was in high school of, you know, a Lamborghini or some stupid thing on the wall.
And I remember thinking, “Oh my God, I’m such a loser. I’m back in my twin bed in my parents’ room, working on this startup.” And so I would have convinced myself that anything was a good idea. Like I really would have. And so, you cannot maintain enough objectivity, except through this one mechanism, and this I’ve used every time I’ve tried to make decisions, which is that I kept multiple ideas alive and I didn’t try to answer the question of, “Is this a good idea?”
I tried to answer the question of, “Is this the best idea out of these three?” And the other ideas kind of kept it honest, because I’m like, “Why do I have to work on this one? I’ll go work on this one.” And so, literally when I worked on the ideas for Andale we had five ideas and every day we’d work on a different one, and then cycle back the next week. And then we cut it down to three, and every third day we’d work on the other ones and just keep cycling, and go deeper, and deeper, and then we’re kind of down to two.
And then, we’re like, “Okay, which of these two is the best idea to pursue rather than, is X a good idea?” Because you’ll just convince yourself X is a good idea. Like, especially entrepreneurs, especially ones that are charismatic. Like the problem is great, charismatic entrepreneurs can create a reality distortion field, but it also envelops them. Like they’re in the middle of that field, and they convince themselves that if they can convince other people of almost anything, they can convince themselves of almost anything.
And so, I’ve always tried to use competing ideas as a way to kind of keep the intellectual honesty required to kind of, you know, see the truth even when the situation’s dire or even when you’re burning through your savings, you know, sleeping in your old twin bed in your mum’s house.
Nathan: Love it. Awesome, man. Well look, we have to wrap there, I should be mindful of your time. Where is the best place people can find out more about yourself and your work, in particular, Health IQ?
Munjal: So, you know just healthiq.com, you can read all about kind of what we’ve done and how we built the company. And, you know, you can actually read not only about my health story, if you go to the kind of About US section where all the employees are but, you can read almost every employee’s story out there.
And so, that’s some of it. I recently wrote…there’s an article in Fast Company about some of these counterintuitive ways to kind of run a company and to scale a company that are kind of a little different. So there’s some stuff out there, but, you know, by and large, you can just email me if you like and I’m always happy to help a fellow entrepreneur.
It’s something that I just…a lot of people helped me when I started out and had lunches with me, and explained to me how things worked, and, you know, I always try to make time to do that for… there’s one entrepreneur I remember he wanted to meet with me really badly, and I was in New York, and I’m like, “Look, if you want to sit in my car on the way, you know, my taxi on the way to the airport at JFK, like, you can have an hour of my time.”
And he’s literally like, “Pick me up at this corner and this corner in Manhattan and I’ll go with you.” And I’m like, “Okay, you know, I’m happy to help.” It may not be the most convenient thing, but I’m happy to help any free moment I get. So, it’s just part of the kind of karma of entrepreneurship and paying it back.
Nathan: Yeah, amazing man. Well look, thank you so much for your time, this was a great conversation. And yeah, I hope you have a great day, I really appreciate your time. Congratulations on all your success.
Munjal: All right, thank you.
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