The following interview is a conversation we had with Joe Gagnon, CEO at 1upHealth, on our podcast Category Visionaries. You can view the full episode here: Over $75 Million Raised to Build the Future of Healthcare Data.

Joe Gagnon
Hey, Brett. Pleasure to be here. 

Brett
As I was preparing for this interview, I came across some content from yours and talked about all of your adventures that you’ve done. I know you’re an endurance athlete. I’m an aspiring endurance athlete. I told you in the pre interview, I’ve done a few ultra runs. So I’m getting into this world. And as I’ve gotten in this world, I have a lot of my friends ask me, why? Why do It? Why my body through this? So I want to turn that around and ask that to you, Joe, why do you do this to your body? 

Joe Gagnon
Hey, Brett, it’s a good question. The community of us who do this, we always ask it, even though we sort of figure it out. I think it touches on this idea that I’ve been playing with for 20 plus years, which is human potential is infinite. We’re not going to find the edges of that potential, but we certainly should lean in and figure out what we’re capable of. The down the middle thing is to go build a good career, white collar world that we used to call it and build companies, make money. But it’s just so one dimensional that I think we miss the fact that we have all of this other power inside of us. 

Joe Gagnon
And one of the ways to find out how much power we have is to take on other struggles, whether it’s sort of the buddhist idea of suffering or just the idea of taking on a big challenge and finding out what we’re made of. And an ultramarathon is a very intense and focused way of doing that. And every time you do one in the middle, you sort of want it to be over. When you’re done, you sort of want to do the next one because it starts to trigger parts of our biology that just lay dormant. If we are only one dimensional, have. 

Brett
You had that be the case? Where after a race, you kind of look back and just wish you were back in that place. I was telling my fiance that after my first ultra, for probably three or four days, I was almost in a state of depression. I was looking back at that pain cave that I was in 80% of the way through the race. I wanted to be back in that place for some dork reason that I could never articulate or explain. But have you ever had that happen? 

Joe Gagnon
Yeah, I think that there’s some reasons why I think the setting is as difficult as it is. It’s somewhat controlled, and it’s controlled by us. So that’s a very comfortable feeling, even if we have. There’s a difference between pain and suffering. Right. The pain of a broken leg is not the suffering that we feel when there’s discomfort. And I think the reason why we like to go back into it is it’s something that we can actively work on and be productive about it, because you get these inputs and you’re like, what do I do with it? 

Joe Gagnon
As a matter of fact, I think it got me as a better board member on the companies that I’ve run because I had to resolve issues that were annoying, whether it be I had a rash or I fell and got bruised or I was hungry or tired. And those kinds of feedback systems make us problem solve. And in a board meeting, when someone says, oh, why’d you miss your numbers? Or what about the competitive landscape? You have a sense, then, of what to do with that difficult question because you’ve sort of processed it on your own and you’re not really reliant on others. And I think it’s just really this idea of getting to practice what you really want to be good at that carries through beyond just a race, but into life. 

Brett
Love that. What’s the craziest adventure that you’ve been on so far? When it comes to endurance and pushing yourself? What’s the wildest adventure, craziest story you could tell us? 

Joe Gagnon
Yeah. In 2017, I ran a marathon on six continents in six days. So I went from Sydney to Singapore to Johannesburg to London to Sao Paulo to LA. So, basically, 12 hours in a continent or a country, and 12 hours on a plane, took six overnight flights in a row, slept 14 hours, ran 157 miles, flew 37,000 miles, didn’t lay down for an entire week, and I pushed this edge of the system that I run here called Joe Kenyon. And, Brett, what was amazing wasn’t. It was just that I did this physical endurance thing with the people I met and the excitement that it brought and the challenge that people took on to participate because they would say, hey, do you mind if I run 5 miles with you? Because I just want to be part of. 

Joe Gagnon
And so it was just like this amazing combination. The coolest part about it is that I just created the idea and went and did it. Didn’t ask for permission. Of course, there’s no one asked permission of. But maybe people say, I’d love to go climb Mount Everest. It’s probably unrealistic for many reasons, but you can take a week and create an incredible adventure. You can manufacture and then go execute and find out what all of that means. It was just unbelievable. 

Brett
That’s awesome. What’s next on the list of adventurers and ways to push yourself? 

Joe Gagnon
Yeah. So I think one thing that I’m just trying to get to is the consistency. Some of it. This year I set out to do 100,000 push ups and run 3000 miles. The consistency of having to run 8 miles a day and do 300 push ups a day is a different kind of challenge than just doing 100 miles race over 24 hours. And so one of the things I think is to overcome because so much of what gets in our way, we can figure out how to overcome it. So if you’re on a business trip and you show up late in San Francisco and it’s two in the morning because you flew from the east coast and you still have your 300 push ups to do, what do you do? You’re in your hotel room. 

Joe Gagnon
Do you just sort of look at yourself and say, yeah, you can go to bed sooner. You did them yesterday, they’ll do them tomorrow. No one will even know. And then you look back at the mirror and you say, those are the only excuses you have. Just get down and do the stupid 300 push ups. And what it does is it’s just teaching me that the noise that’s in our head can be quieted through the discipline that we can drive by the choices that we make. So every year I set out new choices that drive a daily habit or a weekly habit or something that you can’t avoid. And that’s in addition to saying that every year I’ll run 100 miles race, every year I’ll create another new adventure. 

Joe Gagnon
And then the last part of it is to try and get other people out doing it. So my goal is to support crew pace, help people achieve their version of the high performance life. 

Brett
That’s awesome. Well, I hope to see you out at the. What was the race? The desert rats race coming up in April. 

Joe Gagnon
Yeah, that would be fun. 

Brett
I love it. Well, I could spend probably a good 2 hours here talking about ultra running and endurance athlete, but I think it’s time to probably switch gears and dive a little bit deeper into the professional side and the business side. So let’s just start with a high level overview of what 1upHealth does. 

Joe Gagnon
Yeah, so one up health is a cloud modern data platform for healthcare to allow us to take in any kind of data, put it in a standard web format. In our industry, we call aspire, and make that data available to all parties. So a payer, a provider, a patient, a pharma company, any of them that want to interoperate and compute on that data, we do that for them. 

Brett
What about this problem that attracted you to this problem and why this problem? 

Joe Gagnon
Yeah, that’s a great question. If we look back at both my career and sort of what’s happened over the past 30 years in tech enabled reengineering or tech enabled transformation, most of it has happened because we built infrastructure, whether it was the Internet, the web standards, the cloud, networking, all of these things allowed businesses to operate on an end to end process so that they could optimize for whatever they were selling, the people they were serving, and the way the operation needed to run. And so we know this, right, in banking, how an ATM machine works, or in retail, because we could buy on our phone and have it shipped next day, or in travel and transportation. I can actually pick the aisle seat near the front of the plane on my phone. 

Joe Gagnon
These are all things that were enabled by data and standards and compute. And so in healthcare, we have not done that. Healthcare still makes 100 million copies of paper records a year. There are companies who are faxing documents around. It does not allow for anyone to operate at the level that they need to. It’s a $4.2 trillion industry. We are ranked near the bottom in developed nations on care quality, and the experience, we all know, is not where it needs to be. So we need to build a better infrastructure, this utility of sorts, that everyone can leverage to operate better, and that’s what we’re setting out to do. 

Brett
Why is it so bad? 

Joe Gagnon
Yeah, it’s a good question. It’s sort of a historical issue, because we started off with, we had the family practitioner who came to our house and they knew who were. Then the federal government decided that we would build out a third party payer system to actually, in the beginning, to help people who couldn’t afford health care. And then we put in the Medicare system, which changed what happened for people once they turned 65, and then the cost of delivery got more expensive. And there was really driven by the way the medical system works, not a lot of technology, because it was a lot of people. And so we have now spent the past 15 years trying to layer in technology into a business that never really used it. 

Joe Gagnon
And so we’re now in a space where it’s a little bit like the one room schoolhouse. We haven’t really gotten too much farther. Sometimes when you think about education and in healthcare, it still sort of operates at a very personal level. And the third party payer system, which means that you and I are not directly paying for our care, it doesn’t put enough pressure on from a customer point of view as to both the cost and the quality of the service. So we have some big problems to solve. But if we’re going to go do that, we need the right infrastructure in place ahead of time to make that possible. 

Brett
Who are you selling this solution to? 

Joe Gagnon
A good know, our primary customer today are the payers. And I think for people listening, they might think of them as insurance. Know. This is the Aetnas and CVS, Humana, UnitedHealthcare, and then local entities too. They have a need because they serve the federal government through the Medicare advantage system. They have a need to leverage the technology standards to better communicate between themselves and their patients and the federal government. And so we’ve built out this infrastructure, and we have 80 customers in the payer landscape. We also have some providers and then some in the clinical research space who are out there looking for medical data for clinical trials. 

Brett
What’s it like selling to payers? I’m guessing that’s not a quick sales cycle. 

Joe Gagnon
Yeah, it’s not. And one of the things that we did here was initially were selling to more of like the app developer, and then we realized we could sell to the IT leader. And so what we’re playing the game is just the same that every large enterprise software company plays. Find the budget, find the buyer, find the need, bring the best solution. And so it is a bit of having just a direct up account management team that’s calling on customers, new and existing. It works. We’re a smallish company, but we work not that dissimilar to how large tech companies like the IBMs, SAPS, oracles of the world have worked over forever. So, yeah, that’s who we sell to. It is a little bit hard. It does take a while. Contract negotiations are talent, but we’ve learned how to get through it. 

Brett
Are there any numbers you can share that highlight the growth and traction that you’re seeing? 

Joe Gagnon
Yeah, it’s pretty exciting for us. Deloitte every year has a fast 500 award, and they give an award to the 500 fastest growing companies. This period was from 2019 to 2022. So of course, 23 wasn’t done. And on that list, were ranked 35th fastest growing company. We grew 5100% over that three year period. Our employee base also grew from 15 to 155. So a ten x growth in employee base. And as you highlighted, we grew our funding. We had raised in the seed round a couple of million, and the a round was 8 million, the b round was 25 million, and the c round was 45 million. So growth in funding, growth in employees, growth in revenue, and growth in customers. All of that. 

Brett
Talk to us about going from series b to series c. What was that journey like? 

Joe Gagnon
So that one is probably, let’s say it’s like a little bit like going from high school to college. You’re pretty smart, you know what you’re doing, but then all of a sudden, you’re around a lot of smarter people who are much more mature, and you’re like, oh, wow, this is pretty different. So I think going from b to c, you have to start to think about how you become really a reliable, predictable operating entity, because people are now putting money into a predictable system, not just a good idea and not just a big, total, addressable market. They want to see predictability. They want to see how you’re managing pipeline. What’s your conversion rates? What are your retention rates? How’s NRR looking? What are your margins look like? 

Joe Gagnon
And so the dynamic of the conversation starts to feel like you are, and we’re not a public company and not have a plan to do that. But the way you talk about a public company starts to show as you go from b to c, because the c round investor is now looking for a different return model and a different operating team. And they’re not just sold on big ideas. They want big ideas and good operators. 

Brett
Makes a lot of sense. 

Brett
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Brett
I know you started as the COO. I believe that was in 2020, and then you over as CEO in 2021. What’s that like taking over from a Founder? And what was that transition like? 

Joe Gagnon
Yeah, it’s a very interesting balance. I’ve done this many times. This is the fifth time I’ve done that. And I have a deep respect because I’ve been a Founder too, for the role the Founder plays. They bring the idea, they have the inspiration, but for the most part, they’re not an operator. Those two skill sets, there are some, my God, who have done amazing at it, right? I don’t know, Bill Gates and Michael Dell and a few others. Right. We could find ten or 20, but not thousands. It’s a different skill set. And so my experience in having been an operator and a growth guy worked very well with the Founder. 

Joe Gagnon
Know, Ricky was great at building the proof of concept, getting them excited about an idea, but really wasn’t that interested in building sales, pipeline, or HR departments or finance departments or all the things you need to operate. And so, yeah, as a COO, I was happy to do that, but having been a CEO, I felt like that I could really help run the company and help him be successful by focusing on product strategy and direction. He got really interested in AI and we played around with that for a year, and then he went off and started an AI company. And so it was a good natural progression. We both were on the board from day one and we both knew that this was a possibility, but it wasn’t a dependency, it was just a natural evolution. 

Joe Gagnon
And we still have a great relationship and Ricky still sits on the board. And I think that if we can do this more maturely in the industry of early stage to later stage companies, I think some companies will do better. 

Brett
Yeah, that makes a lot of sense. And I think the famous example that I hear about a lot is like Uber, that Travis Kalanick should have stepped down a little bit earlier, like he was the right person to lead the company in those early days, but then held on and then all of a sudden he was in a position where he wasn’t the right person necessarily to run the company at that size and he didn’t give up control, and that led to a lot of issues. So that’s one example of companies I’ve heard people talk about as an example of that. 

Joe Gagnon
Yes, definitely. I think that none of us would want to run four legs of a relay race. You might be able to finish two, but you certainly wouldn’t finish four. And I think it’s just a natural evolution of a company and skill sets, and we should all just find that to be okay. I don’t think we need to run anyone out of town, but I think we need to be honest with ourselves about the stage and what the needs of the company are and who should lead at that point. 

Brett
Yep, makes perfect sense. What about the competitive landscape? How do you think about the competitive. 

Joe Gagnon
You know, we are like an emergent company, so we have people and companies like our size that we compete with. But then there are some of the big cloud players, Microsoft and Google and Amazon, who have health data solutions. We can leverage their tech. They may want to bring in a fhir server. So every once in a while there’s questions about, should I go with a big cloud provider? And our answer is, why don’t you just use their infrastructure, but use our solution? There are other health application companies who have made a foray into this space, but are really not focused on building out data infrastructure. And because we’re in the data space, of course there’ll be one day questions about the big data warehouse guys like Snowflake and data bricks. 

Joe Gagnon
So we have a somewhat crowded space, but now that we have 80 customers, we probably have the most in this platform space right now in the industry. But we like. But here’s the one thing I learned, Brett. You know, you’re too far ahead of the market when you don’t have competitors looking at the same opportunities you are. And up to a Founder, I would just say, while it might be really exciting to be really early, that’s the hardest problem to solve for, because people aren’t ready to buy. Having competitors show up is actually very satisfying and very necessary to all of our survival. 

Brett
When it comes to your market category, how are you thinking about your market category? Is this selling into an existing one, or is this a category creation play? 

Joe Gagnon
I think that it ultimately is selling into the data lake house category in healthcare. Ultimately, because we’re going to be assembling massive amounts of data that you would want to compute against. But in the beginning stages, since we’re not operating at that scale yet, we’re probably more an emergent solution provider in the regulatory compliance space. But every time we sign up a customer, we’re bringing on so much data. We have billions of records and trillions of resources already under management. So the bigger that gets, the more we move into that space. When someone says, you’re more like a data lake house than you are this regulatory solutions provider, so we’re treading in between right now. 

Brett
So we’re about one month out before the year ends. And I’m sure you’re already working on 2024 planning, or have been working on 2024 planning for a while now, as you’ve been planning for the next year and the years ahead. What’s keeping you up at night? 

Joe Gagnon
Oh, wow, that’s a great question. My God, there’s a lot. Although I do sleep very well, if you run every day, you do rest better than you would otherwise. I think that, for me, the macroeconomic issues that we’ve had this year have slowed enterprise selling in a way that none of us, like. This is not just one up health. Everyone was growing 100%, 200%, 500% over the years, and everyone’s now, like, in this ten or 2030, 40%. And, wow, that’s still great, but doesn’t feel great because we’re comparing to where it was. So for me, it’s how long does this sort of economic situation take to settle out? We went from free money to somewhat expensive money, reconciling that against the opportunity for benefits. Even though you can deliver benefits today, budgets are being cut and buyers are slowing the process. 

Joe Gagnon
And so that means you just have to be a better operator. You have to spend properly so that you don’t burn cash too fast, you can’t lean too hard into growth. You have to have your hands on the steering wheel a lot tighter than you used to, and you just have to be doing market reading every month. There’s no sort of shortcut on the road to success right now. It’s a lot of hard work. 

Brett
As I mentioned there in the intro, and I know we touched on that a couple of questions ago about funding, but I want to go into tactical insights and actionable advice. So from your fundraising efforts here and just your previous companies that you’ve been part of, what would you say is the number one piece of advice you’d give to a Founder who’s looking to raise capital for their startup? 

Joe Gagnon
I’m talking to investors all the time. Like, even the day after I close around, I’m talking to investors because I believe that by the time you run a process, you have to have established a lot of relationships. You don’t want to be blind sending an email or a deck to people hoping they’re going to read it. So right after the B round was closed, which was April of 2021, I started talking to a new set of investors. And so if they’re willing to talk to me, I will take 30 minutes. Now there are some, and this might be a little bit controversial, say I’m wasting time and actually I think I’m marketing the company and I’m building a rapport over time. I’m actually showing them through the conversations I have that the plans that we make are the results that we deliver. 

Joe Gagnon
And so by the time we get to raising around, they know who I am and it’s all somewhat expected. And so I put a lot of time into that. And I always think about what’s the role of the CEO? I always think it’s to do the things no one else can do. And speaking to investors, that is our job primarily. Of course, we run the company day to day. I think the other thing is our c round lead I met at what would be called a speed dating event was a lot of investors and a lot of companies raising money. And we had 20 minutes with 6th street and that was the start of the relationship. People say, oh, those are a waste of time. I’m telling you, it’s not a waste of time. 

Joe Gagnon
I got to talk to in that day 15 different investors who walked away thinking something good. And then the last thing is when you go to talk to them, actually come to the meeting with all the questions you believe they’re going to ask and be ready with answers. Don’t be sort of fumbling around. And actually in the beginning, I often will tell them, why don’t I tell you the five things I know you’re going to ask so we can get to some of the more important topics. So you talk about margins and cash burn, you talk about retention, you talk about the growth of your pipeline. Take it on right up front and build that rapport out of deep respect for each other. Get them excited about the business and the prospects, and then leave them wanting more. 

Joe Gagnon
And keep talking, and sooner or later they’ll actually want to hear from you. When you start raising money, let’s imagine. 

Brett
That you were sitting here having a coffee with an early stage Founder in the enterprise healthcare space. Based on everything that you’ve learned so far, what would be the number one piece of advice you’d give them outside of fundraising? 

Joe Gagnon
Know who your target customer is, know them intimately, describe them and understand what their buying behavior is. In the enterprise selling space, quota attainment has reduced year over year, every decade over the decade before. And you’re sort of like, what’s going on? And one of my friends runs a sales training team and he trained 20,000 enterprise salespeople over the past 20 years. And it is to me, there’s two things that are going wrong. We don’t know who the target customer is and we don’t do good time management. This is about being really practical. And it isn’t about just that we have the best idea. These are people who we’re selling into who at 05:00 want to go home and take their kids to the soccer game, right? They want the software to work. 

Joe Gagnon
They don’t need just promises of big ideas and billions of dollars of value creation. And so you have to take a very practical approach to it. Know who they are, know when they buy, know what their budgets are, who is assigning, you know, really be practical and you’ll better at selling. It’s been part of my success throughout. 

Brett
Final question for you, Joe. Let’s zoom out three to five years into the future. What’s the big picture vision that you’re building? 

Joe Gagnon
Well, we’re going to make healthcare better for all. That’s the foundation of our mission. We spend $4.2 trillion on this industry. It’s on the way to six or $7 trillion and 25% of GDP if we’re not careful. We need better health care, we need better quality care, we need lower risk, and we need a better experience. And we believe that a data platform that enables every other industry to transform is necessary in healthcare so that these beautiful doctors and nurses and people who are part of the system can just operate better. So that when you have coordination of care, no one has to carry around medical records with them. When you have a gap in care because someone didn’t get a prescription filled and that really matters, we can notify you. 

Joe Gagnon
Every bit of this is about better data to allow for a better operation. And when we get there, we’ll save 500 billion to a trillion dollars. We’ll have healthier people and even more beautiful on the social determinants of health and on health equity. We’ll be able to fund health care for people who cannot afford it today. And so we’re on a mission to do this. And as we said, where mission meets purpose. I’m setting out personally to continue to make right lifestyle choices so that I can put less burden on the health care system. We can all be responsible about how we live. I can help the industry operate better. And in the next five years we’ll all be just happy to live that longer, happier, healthier life and that’ll be worth everything. 

Brett
Amazing. I love the vision and I’ve really loved this conversation and I know it’s going to be a huge hit with our audience. We are up on time, so we’re going to have to wrap. But if there’s any founders that are listening in and they just want to follow along with your journey, where should they go? 

Joe Gagnon
A couple things, of course, on LinkedIn. I publish a lot. I have a blog@livingthperformancelife.net, and then you can read my book, the high performance life. It’s on Amazon. Follow me on Instagram. And you could always just email me at Joe at 1upHealth. And I’d love to help any way I could. 

Brett
Amazing. Joe, thanks so much for taking the time. Really appreciate it. 

Joe Gagnon
Thanks, Brett. 

Brett
Keep in touch. 

Brett
This episode of Category Visionaries is brought to you by Front Lines Media, Silicon Valley’s. 

Joe Gagnon
Leading podcast production studio. 

Brett
If you’re a B2B Founder looking for help launching and growing your own podcast, visit Front lines IO podcast. And for the latest episode, search for Category Visionaries on your podcast platform of choice. Thanks for listening, and we’ll catch you. 

Brett
On the next episode.