Overcoming barriers in infrastructure and human capital with Joseph Mocanu PhD from Verge Healthtech Fund

 

 

You may have heard the adage, "an ounce of prevention is worth a pound of cure." Today's guest Joseph Mocanu, PhD shares how companies and entrepreneurs across the world are overcoming barriers to bring an ounce of prevention to emerging markets and rural communities. His company, Verge HealthTech Fund focuses on seed stage healthcare technology companies relevant to emerging markets. 

He explains how each of us can get involved and be part of the solution to bridge the gap in life sciences between human capital and healthcare access. We each can make a difference.  

Joseph Mocanu is the Founder of Verge HealthTech Fund. Prior to this, Joseph was a scientist researching new cancer therapies, a medical device entrepreneur, and a management consultant for Oliver Wyman where he led life sciences and digital health across Asia. He has 19 scientific publications, 3 patents, and has made investments in 23 healthcare technology companies to date. Joseph has a PhD from the University of Toronto, and an MBA from the Richard Ivey School of Business.

Show notes:

  • Verge HealthTech Fund: https://www.vergehc.com/
  • Joseph on LinkedIn: https://www.linkedin.com/in/jmocanu/
  • Other podcasts from Joseph: https://www.podfol.io/profile/joseph-mocanu/
  • Qualio: qualio.com

Music by keldez

Transcript

Transcript is automatically generated. Please kindly excuse any grammatical and spelling errors.   

Hi, everyone. Thanks for joining another episode. Excited to have you here. You may have heard the phrase before an ounce of prevention is worth a pound of cure. Today's guest Joseph Mocanu PhD is a computer programmer, turned scientist, turned management consultants, turned health tech investor in emerging countries. You can read his full bio in the show notes, but even though the arc of his career spans many disciplines, it can all be circumscribed into helping solve real world problems, especially in emerging markets. His venture capital company, verge health tech fund, which he started a few years ago has made 13 investments in 11 countries. And he shares a few inspiring stories of these entrepreneurs, overcoming infrastructure and human capital barriers to bring global healthcare access to even the most rural communities. He also shares how each of us can get involved and be part of the solution to bridge the gap that we're seeing in life sciences, between human capital and healthcare access. So let's bring them in.

Grant: 

Well, Hey Joseph, I really appreciate you jumping on the show with us today. Excited to talk about your journey and some of the experiences you've seen from personal experience and portfolio companies you're working with to bring health care, access to people all across the world.

Joseph Mocanu: 

Cool. Thanks so much grant for having me here.

Grant: 

If you could give us a quick high level overview, of your career, how you got from, you've done kind of at all, you've done entrepreneurial things, medical device stuff all the way to where you're now leading investments at verge health tech fund. So walk us through kind of your journey and how you got to where you are.

Joseph Mocanu: 

Yeah, thanks. So I think my life really took the form of three main phases. One's a technical phase seconds of business phase. And I guess third is this current phase, which is more of the investment phase. The technical phase really started with my dad saying that if I wanted to play video games, I had to make them myself. So I had to teach myself how to code at the age of six and. I thought that was going to be it. I thought, okay let's make games and that's going to be my life. And then I realized, oh crap, we get sick and we get old. What do we do about that? So decided to do a different kind of coding with ACG and T studied. Molecular genetics wanted to become a scientist. Did my doctorate, medical biophysics all at the university of Toronto. And I was working on trying to find new cancer therapies and seeing if we can change the way this horrible disease is treated. At the same time, the programmer in me couldn't really sit still and grad students don't really make a lot of money either. So it was just looking for side gigs to help me, make ends, meet a bit and apply my programming skills a bit more. So I had. Accidentally met a medical doctor who had an interest in the brain and he needed some help implementing some mathematical algorithms. He discovered from an obscure Cuban mathematician in trying to triangulate where, the electricity in your brain originates based on a whole array of electrodes, like you'd have. The analogy it'd be a seismograph, trying to figure out where the epicenter of an earthquake is. And it turns out that I had helped them implement these math algorithms. And it turns out you can do it in real time. And because I had 3d graphics programming background, we ended up inventing by accident or real-time brain imaging system using EGS. And that was my first taste and the trigger to transition me into the business phase of my life. We had to raise some money in order to get this thing to reality and run clinical trials and see if this can work. So that was my first experience with venture capital with meeting investors and, it was a pretty tough journey. post.com bubble crash in Canada. Didn't really have the wherewithal to, take a couple of flights down south to see if any American VCs would like to give us some cash.

Grant: 

Well, what year this is says post.com crash. So about what time is this? In 2002.

Joseph Mocanu: 

Okay. 2002, 2003. Yeah. So this was dating myself a little bit here. But it was a really, it was really fascinating experience. It was really. Great getting a chance to form a company from the ground up and getting to touch all the different function fault, from R and D commercial planning, fundraising grant writing and all that sort of stuff. And, well, we weren't that successful in raising long-term capital risk capital. And I thought, well, maybe it might be interesting to sit on the other side of the table because as a VC, as I always quote this from my friend, you get to choose the future in which we live by funding or not funding, different ideas. And I thought working on multiple projects would be super interesting and much more interesting than working on the startup that I was working on for the past five or six years. So I went to business school to see if I could study business, which I learned that is not possible. You practice business, you do not study business. So trying to get the top marks in business school class is pretty, maybe counterproductive towards your efforts. So I wanted to be an investor. My timing again was pretty bad. Did my MBA in 2008, 2000. Which you may associate with a certain crisis of the financial sort and some aspirations of getting a job in venture. W when we're a temper too, let me just get a job period. And I had to go to the other side of the planet, namely in China to find a job. And so I ended up calling a favor and from a mentor of mine to see if I can spend some time with them and learn how, learn, how an investor works. So I worked at a friendly activist hedge fund in Schengen, China, looking at foreign listed Chinese companies and how we can invest in them and help them and add value to make them worth more than just sitting back and doing nothing. And I noticed that the toolkit he was using was out of the management consulting playbook and he himself was an ex McKinsey fellow. And so I thought, well, it'd be really great if I learned how to do this consulting thing to add value to my future investments. And if I did it in English and in nothing but healthcare. As opposed to relying on, English to Chinese, to English, Google translated, McKinsey training materials, and at a little bit of an, a little bit of FaceTime here and there, cause he was a fairly busy guy and to be completely honest, I was pretty useless. As the only, one of the only other English speakers other than the big boss and my Chinese was pretty terrible. So a fascinating experience that led me to make the decision to go back home to Canada and apply to all the top consulting firms. 1, 2, 3, 4. 1, 2, 3 said no four said yes. And that let me do nothing but healthcare. And let me start right away. Joined a firm called Oliver Wyman thought. I'd be there for one or two years. And turns out I was there for almost seven and a half years. First working with pharma clients in north America is commuting to the U S from Canada, pretty much every single week for three and a half years. And then I was asked to move to Singapore to help start and grow our healthcare practice in Southeast Asia. And then later Asia as a whole. And it was there. I would say I started to make my transition to the third phase of my life, which is really around investment. And it was really catalyzed around meeting all these really great entrepreneur. Who are trying to solve some really big healthcare challenges in their local markets pharma companies, insurance companies, health systems, conglomerates, they're all trying to do something about this, but they're set in their ways and really in order to make some of the step changes that are. To really radically expand the quality access, affordability and efficiency of healthcare. You needed some technical technological innovations and some real kind of pound the pavement, heads down, go forward. Let's try and get this done sort of attitude. And I met these entrepreneurs and unfortunately they couldn't really raise capital that easily, especially back then when I started in 2014 and I thought, well, I think I understand the technology and the think, I understand the market have a little bit of extra capital from not paying as high of taxes in Singapore as I did in Canada. Why don't I try Angela investing in these companies and did that for a bit and then did it a bit more and then. I accidentally one day woke up realizing that I had 13 angel investments, nine of which were in healthcare technology. And I think I enjoyed this much more than writing PowerPoint slides for senior executives at pharma companies, and really wanted to do this. Full-time didn't have, the means to do this full-time into my bank account just yet. As I started my career pretty late given all that school I just talked about and then the startups afterwards So realizing that I need to use other people's money. Couldn't find a fund that was already doing. Because that would have been the real easy way to do it provided they would have accepted my CV anyway. So I took the harder path of starting a VC fund. And that's really how I got to where I am right now. Verge has been around since, mid 2018 and we've been lucky enough to support the dreams of 14 different founders across 11 countries. Yeah,

Grant: 

that is a fascinating journey. Thank you for walking through the ups and downs there. I had a couple of questions spin off of things you said. And I think, as you look back on your career especially entrepreneurial career. In hindsight, it can look like, oh, this is how it all worked out. And I'm here today based on the output of all of these different experiences. But at the time it can feel very volatile and unpredictable. I think it's fun to, to hear how other people are getting to where they are today. But one thing you mentioned is that a lot of these entrepreneurs that you were working with in Singapore, I'm guessing that's where you were joining us from right now. You're still in Singapore.

Joseph Mocanu: 

Actually, I'm trying this whole digital nomad thing for a little bit. So I'm in Barcelona right now. Oh, all

Grant: 

so it was pretty late for you. But as you were getting started there in Singapore, you mentioned that a lot of the entrepreneurs had these great ideas, but they didn't have, they didn't know how to raise money. I guess the question there was is that because there was a lack of investment options. Or because the ID, the skillset to raise money to pitch an idea, was that lacking? Was it more a market side, VC side or was it. On the expertise to

Joseph Mocanu: 

do it. To be honest, it was a little bit of both. The whole startup scene certainly wasn't as mature in our part of the world. And I do have to caveat that, I had backed a bunch of founders, not just in Singapore, but in the surrounding region as well. But, a lot of them are first time founders, first time venturing out. They just had an idea that they're really passionate about. And some of them, know, didn't have the benefit of having a financial services background or something else where they had the network or the ability to sell something some did, of course. And they did quite well. And then the other part of it, yeah. We didn't have that many financing options, especially if you didn't come out of an academic institution.

Grant: 

Yeah. So verge health tech fund is starting to help change a lot of that. Providing access to these to these companies. What is your investment philosophy? Like you said, you have, I think 13 investments in 11 different countries. And that's very, that's a very global spread of companies which is really awesome to hear how you're helping these entrepreneurs bring their companies to life and kind of create the future. Like you said earlier. I like that quote. But yeah. Walk us through your investment philosophy. What are you looking for? Somebody who's an entrepreneur in a, an emerging market listening to this? What would be some advice you'd give them?

Joseph Mocanu: 

Oh, I think the first question we would ask is, are you solving a real. What's the breadth of it. What's the depth of it. So by breadth is how many lives would this affect if you successfully solved this problem? And the depth of it is how serious is this problem, is it an issue or is it life or death? The next question is why are you doing this? What are your motivations behind doing this? Understanding a bit about the founders attitude towards. The world, entrepreneurship life, et cetera understanding if they're coachable, understanding whether they've had any real challenges in life, because if they hadn't well, my God, this is going to be a challenge. Doing a startup is difficult, doing a health tech startup, especially in an emerging market is, dialing up the volume to 11. The third real question is what's your edge. What is it that makes you or your solution special and how is that sustainable?

Grant: 

So with the investments that you have made to date and that have, you've asked those three questions to them and they've been able to answer it satisfactorily, to receive, funding. Tell us a little about who the entrepreneurs are at. You said, in an emerging market, you dial up. The probability of success up to 11 and the stress of doing all that amidst all these challenges. So I'd love to hear about some of these companies you're working with, what are some of the real problems they're solving and even the individuals involved.

Joseph Mocanu: 

Yeah, sure. So wanting one example, which I like to say to you someone who is so motivated by, the problem that they personally faced. So one of our, one of our founders Helen, I've been at Skyah she had a daughter who was coughing and when she ever, whenever she went to see the doctor they would give different answers as to why your daughter's. And she thought that this was too in precise, too subjective, and there had to be a better way to do this. So then she looked up on pub med to see whether, know, there are some studies on the use of machine learning to classify lung sounds to see whether there could be a more objective answer to this. And it turns out that it was a solvable problem. And then she thought, well, this is so important. Maybe other people would find this really important as well. And she started a company around. And the crazy thing is that she started this company in Minsk, Belarus, which is a country that's, it's a lovely country full of really smart and talented people, but it's got a certain, it's attracted a lot of attention these days and a lot of negative attention due to some of the actions of perhaps around how the government is running and sort of stuff like that. And, but it's an unlikely pace that you would have expected to find a health tech startup. And I happened to meet her at a tech conference in Helsinki, Finland, because she had won a pitch competition that was going around the region to see, where some of the most compelling startups. And let's give them a free ticket to this conference. So I had a chance to meet her there, heard her story and then thought. It turns out that respiratory diseases are pretty severe. And if you can identify pneumonia early before you have to go to the hospital, if you can identify, COPT or asthma before they exacerbate. And if you can do this with the world's most affordable, intelligent stethoscope, maybe you can save millions of lives.

Grant: 

And so where is that company today?

Joseph Mocanu: 

So they're they've relocated to Astonia because it's a little bit safer. But your IP and capital there right now. It's also EU member and they have a device that is certified in both Belarus and Ukraine. They are revenue positive. They've got a clinically. Peer reviewed clinical study that shows that in fact their device can identify with very high accuracy, the involvement of lower lungs and COVID infections. And they're going for their FDA right now. Oh, that's

Grant: 

fascinating. All right. Well, we will link to that company in the show notes. I it's linked off of your website as well. If you go to the portfolio section of your website I love that story. They went through a lot of barriers to providing healthcare access to people, especially in rural countries, rural areas. As we maybe take a step back and look at some of the challenges that they faced that are maybe common across other individuals and entrepreneurs in this space, what would you say are some of the. And if you could boil it down to a couple of key barriers to providing healthcare access to to everyone globally, what are some of those things?

Joseph Mocanu: 

Well I think the number one barrier is simply the lack of infrastructure. And, if you are in the middle of a, Sulawesi, Indonesia, Where's your nearest major hospital. You can do a procedure or, if you're in, I don't know, rural Kansas, even. Where, you know how easy it is it to get prompt, accurate, affordable, and effective healthcare? That's the first part of it, lack of infrastructure, both hard and human capital, because we do have a major doctor and specialist shortage, and actually even a nurse shortage these days. And then the second part of it is a. Cost and affordability. You have some places where the government spends $12 per capita per year on health care. That's a, that's barely enough for a single blood test. Let alone trying to do anything more complicated than that. And then the other extreme, you have the United States spending one out of every $5 of GDP on healthcare and how sustainable is that? There, there is. A lot of challenge here. But I would say that, and maybe this is my bias, but I think a lot of healthcare, accessibility and cost can be addressed simply by moving healthcare earlier. You know what they say? Announce of prevention is worth more than a pound of cure. And I firmly believe. If you can see some, predictive indicators that your health is going to go downhill. Why wait for your health to go downhill? You can start right away. And I almost feel like what we call health care today is mislabeled. It's called sick care because you only go and get it when you're sick. Whereas. If you had, access to more quality telemetry. And I even these things like these Fitbits are absolutely powerful in what they can tell about you. And imagine if we took that to the next level and we're tracking 15 or 20 biomarkers. And really understand the moment where something is wrong. You can go do something like if you're driving a car, the check engine light goes on. Do you drive another 10,000 miles or do you go to the auto shop and see what's going on? Yeah. There are some people that are going to drive the 10,000 miles of the check engine. Yeah. On the engine's going to blow up, then they need to get a new engine and that's what your hospitals are for. Right? That's the analogy like you live poorly, you don't do the right things and you have a heart attack. Well, you got to go to the hospital. But if we, and there are some people that are like, ah, whatever, I can afford it. I'll just go to the hospital. Fine. Those are the same people that'll take the expensive medications. And the appropriate analogy is I'll just wait for my engine to blow up and I'll just buy a new car.

Grant: 

Yeah. Yeah, because they have that luxury, but not everybody has that luxury of, of, I don't know, savings accounts or whatever they have funds they can do to to use that. You also alluded to human capital and a shortage of professionals practitioners and things like that in the space as well. With your global perspective, is that something that you see. Across the globe that from your experience, or is that something maybe in particular, emerging countries and what are the let's talk about that first week. We can jump into some other questions and what we can do about it. Let's cover the first

Joseph Mocanu: 

part. Yeah. So this is it depends by specialty and also depends by G your geolocation, because on. On a statistical basis, you may have more than enough doctors per capita versus OACD average. But if all those doctors are clustered in a two block, a complex that are all dedicated to plastic surgery, then that's different than having them spread out evenly throughout the countryside. So I think there is a, there is a bit of a shortage almost everywhere other than rich major cities. And. We could go down into deeper details by subspecialty and so on, but it is, I haven't heard of a single place where they've said we have too many doctors that's for sure. But certainly in emerging markets yeah, you may have, Only 500 or 600 specialists in a country of hundreds of millions of people, which is absolutely unacceptable. And then to go to your second question of how on earth can we try to solve this? I think one way to do it is make sure actually there's two really big ways to do it. One is make sure that every waking moment of their working lives is spent practicing medicine. So if they're wasting their time commuting, or if they're wasting their time, doing administration work. That's time that they're not being able to practice their art and refine their art and, deliberate care. Reducing the administrative burden certainly is a big one. The second one is ensuring that they can practice at a distance and you already have this in certain specialties. Radiology is probably the most common specialty where this takes place, where the technician taking the image is not in the same room, some building or even country, sometimes as the person reading, interpreting the image and writing the report. Why can't we do this for other specialties? And granted, there are some pretty Saifai experiments out there where we're seeing, telesurgery take place with, surgical robots and the surgeon by being on the other side of the planet. Yeah. Yeah. There's a whole bunch of stuff that we can do in in, in the middle of that. Cause telesurgery is probably the most inaccessible and expensive way to do telemedicine right now.

Grant: 

Yeah. So if somebody is listening to the podcast today, some of the things you can do. To help with either the infrastructure or the human capital issue. There are maybe there's a handful of things that you could do. One is just being more aware of it. And like you said, there's a lot of administrative work that needs to be done. There's a solutions and solutions that we provide in the future to address that. So the doctors can be more efficient with their time, like you said. What are some other things that come to your mind as we think about somebody listening to this today? What could they do? The next couple of days, weeks or so to help be part of the solution as well.

Joseph Mocanu: 

Oh, I think the role of the person listening. If you're a physician, for example, you could be more open to trying new technologies. I know that. As a physician, you're probably also really busy for some of the reasons that we spoke about earlier, but to make some time to just try something new. And similarly with administrators, same idea, it's let's do some more piloting of these new technologies and see if we can make them work with the payers. Maybe be more open about how you might reimburse these technologies, because until there's a financing mechanism for them in place, it's very difficult to try the drive, the widespread adoption. I think patients, if patients can be a bit more open-minded and I think they have, I think by necessity due to the pandemic and that, telemedicine use has gone up tremendously. But maybe one thing they could do is maybe provide a bit more feed back, how do we make these better from a user perspective? Because the more easy and friendly they are to use, the more they'll be used the more, impact they'll have, maybe the more things they'll be able to do later on. And if you're a policymaker figure out how we can knit all of these different innovations that are happening all at once into one cohesive ecosystem that is speaking the same language.

Grant: 

Yeah. Speaking about policymakers really quickly on that we the company that produces this podcast quality O provides a quality management. For companies in life sciences, medical device therapeutics and others helping, with the quality management across documents and design controls and all those kinds of things. And. There's a lot of change, I guess you could say that we can foresee happening across a regulatory landscape with new innovations coming up and, the FDA and other bodies, trying to make sure that it's safe and effective, I'm interested in your global perspective as well with how other countries are approaching quality management. I know FDA is the one that a lot of companies, a lot of other countries seem to follow. But what are some of the differences in Country's administration of quality management that you've seen. And how does that either help drive innovation or does that stifle it because of, regulatory complexities that can make entrepreneurs feel like they don't want to, approach a problem because of all the regulatories that are involved in all of the tracking and all those kinds of things.

Joseph Mocanu: 

Well, I think the good news is that almost all countries have based their regulatory system following either the FDA or the CMS. And generally speaking, if you go for either one of those, you have an easier time trying to get regulated in your home country. I think there are, there are some notable exceptions where it will still take a long time. Even if you have an FDA or CE mark, I don't want to name particular countries. Cause my knowledge might be a little bit out of date on this. But if you follow one of these two regimes, you're okay. Historically, it's been easier to get a C mark because of the MDD regime. But now because of the shift to MDR that's really created a lot of challenges for startups, especially those that want to operate in the European union. So now ironically, it is now the FDA that is seen as the preferred path. And especially the five, 10 K path.

Grant: 

Yeah. And from your investment side, thinking about quality management, as well as you're investing in these innovative companies, how do you approach the quality landscape as well? A lot of times when we've talked to people about quality management and product development, they can see them as opposing forces, but as a, as an investor, when you're looking at these, different companies to invest in w what's going through your brain as you think about quality management or does that even come I'm assuming it comes across. But what do you look for in a company around.

Joseph Mocanu: 

Yeah. It's an interesting question because you're right. A lot of founders don't think about quality management at all, unless they have already been in the medical device or medical software world. It's something that is usually learned the hard way. Unfortunately. But one of the questions we've increasingly began to ask founders as they do develop solutions, especially medical devices is have you thought about quality management and designing for regulatory approval in step with product development? Because those things actually have to happen hand in hand. It's not like you can make a co a fully complete working prototype. Unless it's like really an alpha version just to de-risk the science and show that it's possible. Without, taking these things into consideration, it's a supremely important, and sometimes you can almost end up starting from scratch again, if you didn't design things properly with regulatory and.

Grant: 

Yeah. Yeah. We've heard some horror stories of people having to do that exact thing and start over because they thought they'd take a shortcut at the beginning. Well, Joseph, this has been a fascinating conversation. I guess one of the last questions I wanted to ask you is you've been involved in this space for awhile. And if you were to look into a crystal ball or had future glasses on, you could see five, 10 years in the future, where do you see this space evolving? Especially with healthcare access in, in emerging areas or just life sciences in general, how do you see it becoming more integrated into the daily life of consumers?

Joseph Mocanu: 

I once heard a wise quote and I forgot who said it it's much easier to predict the future by creating it. So what we're going to do is we're going to try to, build a world where different parts of the health system. Talk to one another where health data. Telemetry all that is continuous it's predictive and where, a digital therapeutic may be just as effective as a conventional therapeutic. And so we'd like to really be able to have, and to live in the world, five to 10 years from now where you've got, as many indicators of concern that you've got to do something with your health than your car has lights in the dashboard or more. And to really have, us living as long and as healthy lives as we possibly can without breaking the bank.

Grant: 

Yeah. It sounds like a glorious future. And one that A lot of people have that similar vision of creating that, like you said, creating the future is the best way to predict it. Lot of great quotes, Joseph, I appreciate it. These are all things that we should we should keep in mind putting them up on your phone screen or something. A lot of good things.

Joseph Mocanu: 

Yeah, only, I only wish I could remember the people that actually said them. My memory for proper nouns is just horrible.

Grant: 

Well, we got to re we'll find them out and put them in the show notes. We'll do a little bit of research for yet. Anything else you want to share? Joseph people want to get involved or follow you? Where can they work? And they find you, how can they contact?

Joseph Mocanu: 

So LinkedIn is probably the best. If you write a short message. I think I'm still the only Joseph McHaney on LinkedIn. I should be tweeting a little bit more, but I really am not. jmocanu was my handle. I I should probably get a bit more involved there and then I occasionally write a blog on medium. So Jmocanu.medium.com. and with maybe parting thoughts is it takes a village. So it's not a winner takes all game. We've got all do this together. It's a wicked problem.

Grant: 

We'll link to all those places for people to connect with you in the show notes. but just Preach it all. You're doing Joseph, keep it up. All right.

Joseph Mocanu: 

Thanks so much, grant. Thanks for having me here and have a wonderful day.