Global Corporate Venturing today announced our CEO Rob Coppedge has been recognized as part of the Global Corporate Venturing Powerlist 2020, a compilation of leaders shaping the future of the industry. In the interview below, Rob shares how he got into corporate venture capital, his thoughts on where investments in the field are heading, and advice for innovators during the era of COVID-19.
1. What’s your background?
I was lucky to have the chance to start learning the venture capital business during an undergraduate internship. At the time, I had little idea what venture capital was and knew even less about how the health care system we invested into worked. I started in the file room of Washington, DC based company Capitol Health Partners and worked my way up. I was learning so much on the job that I didn’t want to leave for business school, so I studied for the CFA exam and received my charter. But more importantly, I had the opportunity to go spend considerable time going deep on our more challenging investments – working with the management teams and boards, supporting turnarounds and strategic pivots. It was a priceless education in the hands-on side of venture investing.
In 2010, I had the opportunity to move into corporate venture – joining Cambia Health Solutions with the objective of building out a direct investment program. We made our first investment on new platform in 2011 and ultimately became one of the most active digital health investors. We were close to our corporate venture capital (CVC) colleagues at Blue Cross North Carolina, and identified an opportunity in 2016 to bring our two programs together to achieve more scale and leverage.
2. 2020 marks five years since founding of Cambia Grove to connect innovators in support of emerging health care solutions. Echo Health Ventures was founded the year after. What problems do you see them solving in the next five years?
The Cambia Grove was created to foster the health care innovation ecosystem in the Pacific Northwest – bringing stakeholders together to build the relationships necessary to create new ideas and scale new solutions. Subsequently, we founded Echo to evolve the corporate venture model in health care – pooling the strategic resources of two progressive health care companies to increase the scale and impact of their CVC efforts. Taken together, Echo and the Cambia Grove acknowledge that no matter our individual scale or resources, health care transformation is a team sport and requires partnership.
Health care is complex, but it has become clear that the primary impediment to successful, scalable, sustainable change are the silos. Some of these are apparent – created by the boundaries of organizations, budgets or economic incentives. Others are less visible and are created by the sense that one organization, one set of stakeholders, or even one individual has all the answers. Echo and the Cambia Grove were established to break through these silos of structure and arrogance – and as the demands for a more accessible, higher quality and economically sustainable health care system become more pronounced in the next five years, I believe both organizations are positioned to make meaningful contributions.
3. What makes corporate strategic investment such a key part of corporate innovation?
We believe there is a continuum of ways for our corporate parent companies to access innovation – and that corporate venture capital is an important one. However, it can be challenging for CVCs to anchor themselves in the optimal spot in this continuum. We believe that with the right sponsorship and support, the market insights, relationships, and investment capabilities can make CVCs essential accelerants for corporate strategy. When done well, the partnerships that can be formed between CVC-invested portfolio companies and parent companies can elevate both businesses.
This doesn’t just happen, however. Considerable work is required to establish and maintain relationships and trust between the CVC team and their colleagues in their parent companies. It requires tending – as executives, priorities and politics change. But when the model is working, CVCs can play a major role in filling, assessing and taking action on the innovation pipeline.
4. How can CVC practitioners articulate their organization’s value to their CEO, board and peers?
When traveling in foreign countries, I have not found that simply yelling the same phrase in English helps the locals understand me. Similarly, Echo has learned that finding a common language for communicating our value and areas for improvement to our parent companies is essential. We speak regularly about our dual mandate to pursue strategic and financial returns. We report on both of them regularly – and rarely report on one without the other.
Over the past few years, we have learned that while some audiences prefer reporting on “portfolio performance,” other audiences require specific examples of portfolio company impact. We tend to approach these quantitatively – with information on strategic impact and investment performance – but always expressed in terms of the story of how this specific company addresses a particular strategic need. As our portfolio of these narratives has grown, so has our ability to tell the Echo story more deeply in each parent company and with other strategic stakeholders in the market.
5. COVID-19 has changed care delivery. Where else do you see rapid shifts in response to the pandemic?
COVID-19 has busted several of the silos I referenced earlier. One of the bright spots of 2020 is the progress we have made toward the adoption of distributed health care access. However, the economic devastation and cultural upheaval of the past six months cannot be overestimated. In this context, Echo is closely tracking other potential silo-busters and looking for ways to invest into them in 2021:
- Employers will need new health care and financing solutions to address the different needs of their upended business and human capital management models.
- Telehealth and remote care will remain essential, but an ecosystem of virtual care solutions and services will develop around it to support its expansion into more complex care (home diagnostics, home tests, etc.)
- Despite virtualization, local providers will still own the patient relationship and they need tools to support their increasingly complex and technology dependent work.
- No matter what happens in November, the shift from commercial to government health plan enrollment will accelerate in 2021 with considerable impact on funding, innovation uptake and almost everything else.
6. What advice do you have for entrepreneurs adapting their solutions for remote and mobile delivery in the wake of COVID19?
We’ve been talking about the shift from high-cost to lower-cost settings for care for as long as I have been working in health care. And while you can still make money as an investor or an entrepreneur ignoring this trend, it is at your own risk. Echo doesn’t make those investments, and with all due respect to those who buy their jet fuel with gains off “optimized” reimbursement – we strongly believe they are on the wrong side of history.
So, as the industry scrambles to adapt to COVID-19’s silo busting – those entrepreneurs who have taken this macro theme seriously are well positioned. We are still in the early stages of shifting site of service and care. There is much left to do to drive the standard of care, even for more acute events, into lower-cost, higher-value, more convenient and consumer friendly settings; including the home.
Consistent with Echo’s DNA, we believe partnerships between legacy health care enterprises and innovators will be essential to this transformation – and encourage entrepreneurs to become fluent in the issues and priorities underpinning these partnerships ASAP. Sustainable economic standards for these distributed care models will require this sort of partnership – with legacy enterprises bringing scale and channel, enabling sustainable and expedited growth that might be impossible organically.
The next frontiers for this work are in rural and underserved communities, bringing mode high acuity services into lower cost settings and starting to move full inpatient services out of the hospital and into the home. Echo, our portfolio and our parent companies are excited to play a role in busting through these silos.