2023 Big Ideas in Technology (Part 2)

In late 2022, our team at a16z asked dozens of

part

ners across the company to highlight one big idea that startups in their fields could tackle in

2023

. Literally more than 40 builder-worthy activities emerged from this exercise for the year and they ranged from entertainment from franchise games to precise drug delivery, small modular reactors and, of course, a ton of artificial intelligence applications, and in this two-

part

series we will cover 12 of those big

ideas

in the second part of today We have big

ideas

that encompass American fintech dynamism and bio

technology

. and health with the voices and big ideas of Vijay pande Julie U Angela strange Anisha charya Ryan McIntosh and Michelle Vols as a reminder, the content here is for informational purposes only, it should not be taken as legal advice on business taxes or investments or used to evaluate no investment or security and is not directed at any investor or potential investor in any accz fund.

For more details, see a16z.com disclosures. Thanks for carrying over some of the AI-related topics from part one. Let's start with a niche. Hello everyone. I'm Anish. by Andresen Horowitz I'm a GP on the fintech team and my big prediction is about GPT applied to credit counseling really unlocking credit counseling at scale, so here's the idea that open AI chat creators from GPT have created this incredible new

technology

. that everyone's seen on Twitter that it's doing all these notable things and you know one of the things that's been discussed is its ability to drive its product cycles in fintech and financial services, which I've been thinking about, you know?

Based on my own experience, it has been how credit coaching, credit counseling and counseling can be improved, and the reason for this is that you know that technology unlocks a supply of labor at a cost 10 times lower than the of humans, so if it's the only profitable way to provide credit counseling in the past was to subsidize the human cost, you know, high fees, high prices, or provide lead generation for financial products that weren't as amazing to consumers , now we have a technology that can make it possible for companies to offer the same quality of service without monetizing them in that way and really the problem that is being solved here is that credit advice and training is something that is a kind of moderately complex expert system that no user interface is capable or has been able to do so far perfectly. capture, it's really difficult to create a user interface that captures all the nuances of what you already know: having a 15-minute conversation with someone who really understands how the credit system works and can guide you on how to improve your credit that way. 15 minutes is invaluable and So far, no user interface or technology has been able to capture that perfectly and with GPT credit you can really provide that service and deliver it at scale and I think it will change a lot of people's credit and really change financial services in a way. more espacious. as you know potentially the entire country and a lot of people that get involved with financial services become more creditworthy so this niche is really interesting to set the stage for the size of this market and let's look at that not just in terms of the people that are currently. using credit counseling, but also people who maybe could benefit from it but couldn't afford it in the past, so credit counseling there are a few ways to think about the size of the market, there's no perfect answer, you know, There's kind of what I call The Dark Heart of Credit Counseling is that you know you go to a mom-and-pop restaurant in some town in America and you see a stack of business cards from someone promising to fix or improve your credit in just one. week or a month. and usually those people you know do it through some shady techniques and charge really high prices.

Do you know the technology companies that really took the first step in this and these companies were successful? I mean, if you look at a company like Credit Required Karma for seven billion dollars and you know they've provided credit enhancement and credit training to over a hundred million people. That said, if you look at the actual credit impact in terms of how many people got scores, how much better? a service like that, only a small subset of people who use Credit Karma actually saw a dramatic increase in their scores if you think at the broadest level, you really know all the people in this country who have a bad score, um, what is it? the idea that you know that.

They are considered riskier than they really are because they don't know how to play the credit game. That's a huge number of people, certainly more than tens of millions of people who could potentially benefit from this and look to lenders. And creditors will also benefit as the people they lend to can make better decisions and manage their money more effectively. Yes, I like that framing and I can definitely see how this could be a wonderful democratizing tool for those who can't access it today, but I also have to think about how Finance as a space is, as you could say, less fault tolerant. which maybe other spaces that AI is currently being applied to, so just as an example, if I go into the chat, hey, I'm looking for a recipe on how to make rosemary chicken right if that recipe tells me to add a little more leave the desired one, everything will be fine, however, if I request some of this credit counseling through an AI and it tells me to allocate my money ineffectively Well, that maybe again is something that is less desirable and something that the People will be less willing to endure in terms of error rate, so how do you think about that and, as an addition to that, how do you think about regulation? could play a role, the truth is that credit counseling and most financial advice is actually less subjective than you might think, so how much salt to put in a recipe is a bit subjective.

You know a certain chef might like a certain chef a little more. You may like it a little less, although there is an answer, albeit a moderately complex one, for how to optimize a given person's credit and finances, and I think you know that these big language model-driven systems will work. I know they will work very well. against that set of problems, it's a kind of closed domain answering problem. I'm wondering, do you think there will be a couple of bugs that will really raise eyebrows and therefore prohibit people's ability to implement this at scale? What I mean is that the people who are the first to move forward with this feel that you need to do it really well from the beginning, yes, I think that's right.

I think there is a subset of challenges within this space and a subset of customers who know who desperately needs the service and are doing it so badly that you know any rational advice would be better than nothing or who has a number of problems that are actually very concrete and easy to approach, so yes, look, I think so. you need to have an incremental approach to this, but I think the wrong reaction is that you know that because this is actually coming from a piece of technology rather than subjective judgment driven by a human being, it's probably going to be wrong.

I think probably To be much more right, another thing that comes to mind is the incentives at play here, so some people might say that these financial services companies make money off of these people with bad credit and maybe more money than people who have good credit. So maybe there is an incentive for them not to want to implement this technology. So what do you have to say about it? I disagree. I think many financial services companies charge the prices they need to to make a profit. to each customer based on their respective creditworthiness, you know, I think the description of some companies that you know as good or bad is just fundamentally incorrect framing, you know they have to make a profit, they charge a price and the price they charge depends on the consumer default rate, if that default rate goes down they can charge a lower price and receive the same profit and more importantly they are subject to less volatility in markets like this when my market cycle is changing And if a business or a book can be ruined by a sudden change in the consumer's creditworthiness, that's a good way to put it.

I think another framing that I like of your big idea was this idea of ​​just unlocking a 10x cheaper labor supply and so where else in fintech do they do that? Do you think this could perhaps be applied and specifically looking at

2023

? Do you think there is any ripe fruit? There are many ripe fruits. I mean, the low hanging fruit is anything that requires you to know customer service. I think one of the most decadent features of working with a private bank, um or being rich, is the ability to send an email to our phone to resolve your issue that way and that will be unlocked for everyone you know, having than using an app that doesn't have a field that you can or a drop-down menu that can answer the problem you're having that day with your bank, it's a very frustrating experience, like calling a call center and waiting forever, and that goes to be a thing. from the past, I think everyone is going to have a set of interactions like a private bank or at least an interface for their interactions with their bank, so that's wealth management.

I think it's another wealth management. Wealth management is complicated because it's one part advisory, you know, one part. advice and for obvious reasons it's hard for people to empathize with the system so the therapist aspect is going to be difficult but the advice aspect is going to be marketed. I'm glad you mentioned the therapist element because it's been fascinating. seeing how even companies like people replicas are forging real relationships with technology, sometimes it's on the cutting edge where they know it's an AI that responds and interacts with them and sometimes it's invisible so it will be fascinating to see as a whole, it's really great, I mean, if you read the newspaper, everyone is very angry about technology, if you look at the NPS of Google, Apple, Facebook, all these companies, you know that not only is it better than the MPS of your financial services companies, and you know most of them. media and I mean they are among the most beloved companies in the world, so the idea of ​​consumers adopting this at scale even though their mental model has to change around things like therapy in the context of financial advice is not crazy, next we have Angela, hi, I'm Angela, stranger, I'm a general partner of the fintech team here at Andreessen Horowitz and I believe that in 2023, complying well with compliance Enabled technology will become in a competitive advantage versus a nuisance This is something that needs to be done in the background, so if software is eating the world, it still hasn't affected compliance enough after financial services firms Dodd-Frank face more than 50,000 regulations across dozens of federal and state agencies—and that's just in the U.S.—existing, highly manual compliance policies and risk processes are failing both large financial institutions and fintech startups backed by sponsoring banks;

Additionally, while compliance is complex for companies operating in a single geography, it is even more difficult to manage across multiple countries and as more global companies incorporate fintech, the need for global risk and compliance infrastructure is increasing significantly in 2023, businesses of all sizes will turn to software to solve their challenges. We expect to see more tools for sponsoring banks to manage third parties for fintech companies and companies incorporating financial services to manage all aspects of risk and compliance and, importantly, more compliance infrastructure that serves predetermined global companies. Okay, Angela, you mentioned 50,000 regulations, which is a ton, and I want our listeners to have an idea of ​​the burden that this places on businesses.

Without really commenting on whether this is a good thing or a bad thing, what kind of operational or economic weight, again, using the word weight, these regulations impose on fintech companies, like it's the one percent of Opex 10 50 that they have that allocating resources to make sure they are compliant is very expensive and the existing solutions don't work very well, as you can imagine the numbers vary widely but you know there are large bank surveys that are done every year and the estimates range from six and ten percent. ofthe banks' income, their entire income is spent on compliance costs and they are spending all this money and yet we feel like we read a different headline every week about fines like, for example, since the last financial crisis As of 2008, there have been over $250 billion in fines for poor compliance procedures and if you look at how this actually affects operations, it's bad and it's getting worse, like some of the biggest banks. , if you read their annual reports 10 years ago, four. percent of their employees were in the compliance and risk functions and now it's up to 15, but also if you look at this and you see it from our perspective like it's a huge opportunity, but first it's helpful to understand why and mainly three reasons, one that everyone points out is the Dodd-Frank Act that went into effect after the last financial regulation, so there used to be 30,000 regulations across a variety of state and federal agencies, and in a very short period of time. it shot up to 50,000, but this happened very quickly and in many cases it didn't have enough time to become very clear which points to problem two, whether you had compliance procedures that worked well in the old world and there was some software and a lot of manual procedures and, suddenly, that complex actually doubled.

Their software simply wasn't set up to be modular and accommodate new rules, so what were banks to do? They often just threw a lot of people into the problem of the program, so you talk to some of them. of the big banks and they have thousands of people often sitting abroad who are monitoring the AML alerts of the CA sanctions resolutions, so it is just a very, very heavy business, and then the third reason, which in Actually I think it is excellent for the industries, the industry has evolved a ton in the last 10 years, not long ago, all financial services were carried out by entering a bank.

I like to say that every company will be a fintech company, now we get our financial services from all kinds of different software companies that We are much more global, we pay in different ways and there are many different types of regulations that come along with that that everyone financial services absolutely have to adopt. I mean, you sent me an article where Coinbase was recently fined $100 million for background checks. The flaws and Coinbase is a large public company, they are highly capitalized and they are struggling with these compliance needs if they can't keep up. How will smaller startups navigate?

Listen and Coin and this is like Coinbase takes compliance very seriously. and this compliance had nothing to do with cryptocurrencies, you just know that all financial services institutions have an obligation to understand who their customers are as they go through the onboarding process, so imagine any company like the one you are in configured. I have their systems working fine and in their case, what happened is that cryptocurrency prices were increasing. They're a regulated cryptocurrency company in the US, they do a very good job at what they do, and all of a sudden they had 25 times more. monthly transactions, like for example, how do systems that are not completely software-based actually scale to that, so you ask how do small businesses handle this somehow, businesses that are starting out now have a bit of an advantage, because if you start something new instead of trying to fix systems that you already have in place, you know what you're going to deal with and then two, and these are the interesting pieces from an investment perspective, technology in space has come a long way, as well as teams that deeply understand the technology and really understand the compliance procedures, like for example, if you contact someone and you need to do what's called enhanced due diligence, you often need to verify that you know a photo of their physical ID and There are many companies that have been doing this for a long time.

You would expect them all to be automated. They often send photos of their ID to people who manually verify whether this ID is real or not. Now that image recognition technologies have improved a lot, the technology can solve these types of problems and we are seeing this applied in many different areas of compliance. I'm glad you mentioned automation because that's something that really stood out to me in the Coinbase article was that they had a backlog of a hundred thousand transaction monitoring alerts and 14,000 users that required additional due diligence, so it's just an unwieldy amount of information for a company to pass on and again looks like even a highly capitalized company.

It's just not realistic and that's why I'm trying to understand if these things can be automated with technology, if they can be actuated or regulated through code or if we are somehow resigned to this idea that we hire a group of assistants in the foreign to serve through the data manually, like what are we seeing in terms of the introduction of technology in this space, well, if you ask gbt chat, that answer will basically say surprise AI, but let me tell you a little more specifically, let's take any money laundering for example, again there are billions of dollars that go into this problem, depending on which estimate you believe, only three percent of the dollars are actually captured, there are two trillion dollars that They are still washed every year, so you can see the technology behind them.

This and it is a very manual alert system, so, for example, anyone who makes a transaction of more than ten thousand dollars must flag it. Someone on the back end has to go check to find out who exactly this client is, this, you know, this wash is. or not, so they are rules-based systems that, as we've seen with other companies, just don't scale now with the introduction of AI and machine learning, they can do things like two things, one of them is Better to gather some information from the customer. which is located throughout the bank, which greatly speeds up the manual review and then two, dramatically reducing the number of manual reviews that actually have to be done because these systems can learn based on what the compliance officers are doing and, therefore, So generating a lot fewer false positives, like if you need to go through a manual review, that's a much more reasonable amount of stuff that a human being could actually handle and I think that's just a simple example that you can apply.

You know, this and other technologies in very large areas and across financial services. When we talk about these different regulations again, we mention 50,000 of them and they also cover different types of regulations, so when I think about companies in these spaces that are helping other small or large companies navigate this ecosystem, it comes to mind. the mind. for cross border compliance regarding payroll sardine for kyc, which we have already mentioned in AMR, are there any other gaps you see in this? I'm going to call it this compliance web because it really seems difficult to navigate. That you don't really see companies that effectively serve any industry that is difficult to navigate has generated a very large industry of necessary consultants, right? do this well and then they just see a network of providers and what you do, so I would say there are a lot of opportunities, but three, I would highlight one, traditionally compliance has been very siled, like you think you start with knowledge. your customer and then you get the customer in, you have to monitor their transactions and then you can have some separate system for fraud and none of these necessarily talk to each other, you have all these different types of vendors, you have new sources of data that could join, how are they integrated?

And now there are startups that sardine mentioned that are really looking at this from a similar perspective. Fraud has a lot to do with who is on board. It has a lot to do with transactions from a holistic point of view. perspective and just better feeding this data into a loop and making it much more modular to integrate new types of data sources, so just looking at this problem from a holistic point of view opportunity two, you know, we talked a little bit about coinbase um just in In In the US, more than 10 percent of people have a crypto wallet and therefore it makes sense to have on-chain compliance systems completely separate from the off-chain world, if often people are the same ones, and that's an opportunity to add more data to the sentence to improve compliance and then the third part that I'm quite interested in, which has a coordination challenge, but everyone in financial services has data to often very isolated, so for example, if I suspect as a bank that one of my clients is a money launderer and I want to get information from another bank so I can prove it, there is a long compliance procedure and I can do that, so how do I Can we better enable data sharing that can help Elevate? every financial institution in doing a better job on compliance yes, I am going through this right now as a customer of several banks and financial services companies where I am changing my residence and I have to go through the exact same thing for a long time. arduous process with each one and of course there are privacy concerns about what information is shared between these different entities, but again, as a consumer, I am experiencing this issue right now.

One thing I want to ask you about as we close this out is how it's enforced. it relates to competition, what role it plays there and as we see this increased number of regulations, if companies choose to go to other jurisdictions where perhaps this is not the case, you know we have invested in many global companies, such as It happens with all the others. The country has quite significant compliance regimes, and they are very different, so I think from the point of view of what this will look like in the future, I think there are opportunities for new compliance companies to help keep up with the different changes. regulations in all kinds of different jurisdictions, so if I'm a company in the US and I want to expand to Brazil, I have to learn a whole new and different compliance regime, wouldn't it be great if I had an infrastructure provider that could help me? help to? making sure we're compliant and helping to continually comply, so I think the opportunities here are really twofold: one, obviously, startups helping to rethink this highly manual procedure in different jurisdictions in different ways and then two, I think startups that already they know are not compliance companies but need to comply are going to think about what their compliance systems are and what their approach to compliance is from day one, in the same way that they think about many other elements of their infrastructure and go into their strategy to that one often provides a better customer experience, but then two keeps these costs really low to spend their profits on other things.

Yeah, I mean, going back to what you mentioned before 10 Income, that's a lot, that's not. 10 profit, so I think this will be the most important thing, think of all the new products you could create with 10 of your income. Next we have Michelle. Hi, I'm Michelle Vols, I'm a member of the American dynamism team and this. is my big idea for 2023. small modular reactors advance the nuclear renaissance, although nuclear power accounts for 20% of US electricity, it is commonly misconceived as a dangerous and non-viable option when it comes to adding sources reliable sources of carbon-free energy, but recently nuclear energy has been experiencing something of a renaissance with the inflation reduction law allocating $30 billion for tax credits for existing nuclear reactors, a first for the US. , the time is now to usher in new innovation in this space, there are opportunities throughout the nuclear supply chain. from fuel sources to mining, manufacturing suppliers and more, and one area I am particularly excited about is small modular reactors or smrs, by leveraging advanced manufacturing techniques and modular design, smrs can be mass produced quickly and efficient, significantly reducing costs, which can generate nuclear energy. more accessible for a variety of applications, including providing clean, reliable energy to remote communities or even a day in space, while there is still some way to go to reform the regulatory frameworks for these types of reactors.

SMRs in the broader nuclear industry are likely poised for growth. in the next year, so I feel like energy has been a priority in some of the geopolitical changes that have occurred,especially in the last year, but I feel like within that conversation nuclear energy has become a more prominent topic, but at least in my world it's not nonsense. So can you go a little deeper into what smrs are and maybe how they differ from a traditional nuclear plant, whether it's the difference in size, cost, and the time it takes to actually build the smrs or the small reactors modular ones that are basically exactly what they are called?

They are small, modular reactors and what that means is that they can be deployed in places where traditional nuclear plants will never be able to provide the scale that a traditional nuclear power plant would, but they require significantly less capital expenditure and can essentially be shipped wherever they are. need, so it could be like remote communities, on ships or in space, and because of its size and the timeline, it opens up a lot of new opportunities within a time frame that is really reasonable for us to get this in years. instead of decades can we be specific about those years, such as how long does it typically take to establish a traditional nuclear power plant versus an SMR?

Most of the time in a traditional nuclear power plant is actually like getting the site location, reviewing all the specifications, getting all the designs approved and that just takes a lot of time, um, there's just a lot of delays and we haven't seen building a new nuclear plant in decades, um, with smrs, we believe it. it can be done in years like there are still regulatory things to get through because this hasn't been done yet there hasn't been a similar design framework on the regulatory side to say this is how they should be built this is the timeline um , but there are a number of new ventures, like building today and getting designs approved and, um, getting down the road to building them, so we don't know exactly what the timelines are, but I think we're excited about what could happen. in the next two years or before 2030. that's exciting and I like the framework of decades versus years, something that you just talked about that has come up in my very limited research in this space is regulation, it seems that the time it takes to achieve it.

All the approvals needed to build a plant are astronomical or at least more than I think most people would think and it seems like maybe some regulatory reform is underway. You also mentioned the IRA allocating funds to nuclear energy. What should people here look for in terms of reform? What kind of reform do we need, whether with respect to the traditional nuclear power plant or these? smrs that sound like they are a little newer and maybe less concrete in shape. In the US, the Nuclear Regulatory Commission or NRC is the body that would approve any new nuclear site, or nuclear reactor, and is often cited as one of the main obstacles in progress towards building more reactors there. super high fees, like millions upon millions of dollars, just to get designs vetted and approved there are very long timelines to get through the end-to-end approval process there are disputed frameworks on how it regulates like radiation, which slows down even more things and as I mentioned before there is a critical lack of a regulatory framework for smrs in particular, as if they have not actually been built before, so there are still no guidelines to reduce the fees to approve the designs and the Accelerating timelines in general are both, I think, essential steps if we want to see more SMRS in production in the coming years.

Yes, I was very surprised to hear that in the case of some of these regulations there is actually not even a threshold of the appropriate amount of radiation that is allowed, it is just a vague feeling of doing everything possible to limit radiation, which is not something from which many people can act. Are there examples of other countries that have perhaps established more readable, perhaps more actionable, legal frameworks or regulatory frameworks with nuclear energy and what have we seen in terms of those other countries in terms of perhaps what we can learn so that other countries are in various stages of development and support for SMRs in particular.

For nuclear energy in general, we have seen some progress in Europe toward approving similar construction sites. I know China is investing a lot of money in nuclear innovation, but at the end of the day, countries that are lowering the barriers to similar construction. and testing these reactors and getting plans to start development are what we should consider and pursue, and overall, international coordination is going to be really critical here in this domain. Once something is approved in a country, it should help. lessen the burden on other countries and so there are some organizations that are working to coordinate across countries and internationally, but I think that will be something that we should look towards and really engage in in the US as we people listen to this, there may be potential Founders, some of them won't want to be the entity that goes and sets up another nuclear plant or an SMR, but one thing you talked about in your big idea was the idea of ​​the nuclear supply chain and all these other businesses that kind of ladder up to the end product, whether it's mining or manufacturing, can you take this a little bit further in terms of the different types of businesses?

They are things or gaps that people could explore if they are really looking to be part of this industry. In 2023, when we hopefully start building more reactors, there will be needs for materials and things like uranium or cooling materials, depending on how the smrs need to be cooled and built, there will be needs around manufacturing and transporting the reactors. small modular so you can move them, but there are still some things to think about about how to move this sensitive material and then there will be needs like getting rid of nuclear waste and thinking about the recycling process, maybe on the more exciting side there will potentially be They have unlocked new areas, such as decommissioning or reusing other types of power plants, such as coal plants, into nuclear plants, so I think there will be tons of opportunities throughout the chain and even software to coordinate all of this or to tracking and monitoring emissions and things like that on that nuclear note currently we're talking about it in the fission posture that people are more familiar with, but there have been other advances in fusion that I think are a little bit further away.

I don't want to get too far ahead. of our skis in terms of talking about their economic viability today, but 2022 was an exciting year where at least one group was able to demonstrate a net energy gain and I think 2021 was an exceptional year in terms of investment in nuclear fusion companies and So while these are two very different things in terms of where they are in terms of their ability to be implemented today, do you have any thoughts? Do you know where you're going? What is Fusion's role in this larger Matrix or how might we think about it?

So I think the overall energy needs over the next few decades and beyond are large enough that there could be many solutions, and I would love to see more advancements in Fusion. I think it could be an absolute game-changer if we unfortunately can get there. I think it's further than we would like in terms of who people expect, especially if you think about something like a scalable solution or something that could power an entire power plant, one of the main reasons I'm so excited. The truth is that we are not really waiting for new scientific advances and these things are planned to be built again in the short term, in the order of years, we could see them in production and, in fact, producing the energy that we need, so, while Fusion is very exciting and I definitely hope that scientists continue working in that area.

I think in the short term it is this vision and it is the smaller modularity that will be the advances that we will see. I feel like I have to ask this question after you mentioned this. idea that the technology already exists if we look outwards, say five ten years from now and we are still at the point where nuclear energy hasn't really made any progress, it still takes decades to create our plants, we still don't have the right infrastructure regulatory in place, like what would cause what is causing us to be at kind of a friction-filled point in the Arc of history when it comes to nuclear energy.

I think a lot of this is on the regulatory side, like we need to decide, as a country, that we want to invest here and we want to drive this forward, it's not going to be a question of whether we were able to build it, but whether we decided that we wanted to invest in this, whether we said that we wanted the biggest nuclear power. The barrier is only humans, not innovation, only we stand in our own way. Next is Ryan. Hi, I'm Ryan McIntosh. I am a partner on the US Dynamism team reviewing the space supply chain.

The ancient past of civilizations is segmented by advances in mining. and Metallurgy the stone, bronze and iron ages in each period success over your rivals was determined by your ability to collect resources and produce increasingly useful technology today we are in the space age and the same rules apply space Supremacy will be the The yardstick of industry and military power for the foreseeable future is already underpinning our digital economies and guiding our autonomous systems, but the true space industrial base is much broader. So we just need to build advanced rockets and satellites, but muster the materials and industrial capacity to do it reliably on a space scale. does not begin with takeoff a complex global supply chain from mining to the launch pad must be reviewed and secured within our Global Alliance Networks beyond Earth infrastructure must be built to service existing Assets in orbit Empower more missions ambitious to deep space in 2023 the space industrial base will continue to grow in size giving rise to critical companies that serve the interests of our nation at the heart of this inspiring resurgence founders are pursuing difficult problems in materials manufacturing and space infrastructure, okay, Ryan, I feel like it's a fascinating prediction or a great idea, but I feel like we have To start with the question of why, why should we build advanced rockets and satellites using your words reliably and at scale?

I think the most important thing is that the United States should be the leader in space. This actually goes back to a quote from JFK when he gave his famous Moon speech at Rice University where he said that no nation that hopes to be a leader of other nations can expect to be left behind in the race for space and I think that's incredibly important not only then but today, as we have new close rivals entering the race. domain why are satellites important? They drive a lot of our economy, you know, this telecommunications infrastructure, this is GPS, these are things that are relevant not only to the business side but also to the military side, as well as talking about the military side and in times of war. , as an example of Ukraine.

We have sort of near real-time Earth observation and signals intelligence coming from that, this is essentially, you know, the maximum height advantage in warfare, but even something like climate change, the fact that observation Earth can see where the tiny emissions are coming from. detecting weather and variations in climate is vitally important to solving those problems and perhaps lastly and perhaps longer term, there are essentially infinite resources in space, which is why we think about a lot of these things about mining or even just access to energy. in space, so in the long term, if we want to continue growing as a species, we will eventually have to figure out how to harvest and use space resources.

I like that you illustrated why and I think it's an important aspect. As we explore the idea of ​​pursuing space more intensely, as you mentioned supply chain, a lot of people think about the last mile there, which is actually launching a rocket into space, but there are a lot of things that lead up to that and as We explore that. entire space supply chain, as you said, from mining to Launchpad. I want to understand which part of this chain do you think is most at risk or we could reframe that to say which part of that supply chain has the greatest business opportunity, which part of that has the biggest gaps for critical new businesses to be created, so what the way I think about space and the space supply chain holistically is that space is kind of a well, you know, the final frontier is where our industrial capacity is and the things that we can build, actually we can extend and therefore it is not just about the platform oflaunch, it's not just rockets going into space and satellites, but it's everything else that allows us to do that and so these are things like mining, to get the resources that we need.

We need to build the things and it's not just the things that go into space, which are predominantly aluminum, so a lot of our things are built with aluminum and titanium, but it's everything else, like building the factories, the computer chips , and even things like power generation. So how are we going to actually get the energy to do these things and build? You know, thousands of satellites or thousands of rockets. These are all things we need to think about, so mining is first and, specifically within mining, I look at Midstream refining. not only extract the materials but convert them into workable metals and there are specific metals that are very relevant.

You know some of the metals in batteries and things for energy storage and generation, but even things like the weird ones that are also used in magnets. they actually make space components, so this is one of the companies in Apex's portfolio, they're actually building satellite buses, so a lot of companies are looking at potentially expanding the space infrastructure that we have today, whereas today it's kind of construction tailored. Rockets that build satellites. Whatever you need, if we're going to make thousands of these and scale them up, we need to be able to develop a mass manufacturing process and that might require breaking up these vertically integrated companies like SpaceX, which makes everything and makes each individual component and build.

A separate company that handles just that last piece is what's called Osam, so it's an in-orbit manufacturing and services activity that serves this satellite and space station market. If we're going to have 30,000 satellites in orbit, we need to really have the kind of companies that can repair them, fuel them and service them to get them out of orbit, so I think those three areas are the most immediate opportunities when exploring these. Space opportunities are inherently moonshot opportunities. I mean, let's take a company like SpaceX and SpaceX. I think you have provided a good example of a company that has the ambition to make us a multiplanetary species, but has also brought that back to earth, you could say that it has a business model that funds its progress in the case of Spacex. providing internet to people on Earth today, so again, we're not just betting on tomorrow, but we're really showing that they're providing value through the revenue that they're generating for that eventual moonshot, so I'm curious to know if there are examples that you could provide other companies that maybe have been able to build that bridge because I think maybe one of the reasons why maybe more Founders aren't pursuing space companies is because of this moonshot nature, it's like build or fail and I love sharing different examples where maybe that's not the case.

I think the most poignant example is the company I mentioned a second ago, Apex, where they are building satellite buses today, so they are following everyone's curve in building satellites. By being pulled into space, some companies will find it much cheaper to outsource another company to build satellite buses so they can do it today, but in the long term, they will expand to build many other things that will be used in space, so the actual product is Matt's space hardware manufacturing, but today they are focusing on what can be addressed immediately, which is satellite buses. More generally, there are two areas that I think are interesting in terms of how to approach the market.

The first is what I call Jamestown business. Jamestown was something I used in my essay, but if you remember historically, Jamestown was the first successful settlement. on the east coast of the United States, the reason they were successful was that they had the competitive advantage of growing tobacco there and selling it in England and Europe, and that's kind of what we've seen with space, particularly in the mature Earth observation market. where they were able to install satellites and they had a competitive advantage because they were the only way to get satellite images and to handle these types of telecom networks they had the immediate market for it and they were able to build it in the long term, those companies will probably expand this to other domains, but the way that company is built at the beginning is a service that that market, the second is tracking military contracts, then the first type of client for a lot of space pushing the border if The will is often from the government.

SpaceX still largely gets a lot of revenue from the government, but looking at areas like space domain awareness, which is essentially knowing what else is around you, was particular, specifically if it's like a very important satellite that can see what's around you. around you. Those are, you know, orbital debris or an enemy satellite that is very important for the space force and for other government programs, also for space tugs, so being able to take something from a lower energy orbit and push it up now there are companies like Northrop who have shown This is called life extension, which is basically taking a very expensive satellite and pushing it up a little bit further so you know it can last longer in space before it falls to Earth, and then for Artemis and some of these programs. the Moon, you're going to need something to carry it once it's in space that long mile, um, you know, to the Moon, uh, and then lastly, there are a lot of areas like tactical response that have more applications military, um, but looking at military and government contracts as kind of a path to revenue and then when the commercial opportunities catch up, you'll be there and you'll have the technology ready to go, you'll be ready to ride that wave.

I feel like um. I would be remiss if I didn't cover this question as we close this out, which is just that you know in your big idea you framed this idea of ​​space providing the I could say that this yardstick of power, um and I think some people I would say no, Ryan, that's still on Earth, like access to land, water, critical materials like cobalt, that's really what's going to be the measuring stick of different countries or entities that are successful. What would you say? I think people don't realize how. important and our critical space is already equalizing battles and Ukraine is a good example of this, where the United States can provide a kind of real-time intelligence of troop movements, uh, signals intelligence capable of detecting everything that is said , each message that is transmitted. sent um and targeting capabilities to be able to actually know where people are and then also be able to send missiles to where all those assets are to be able to provide that infrastructure in space, so even though they are ground battles are required, the infrastructure to facilitate that and actually win wars in the future.

You know these assets in space, so not only are they important to win, but they are also one of the first targets if there was a real conflict between the United States and China or Russia would go out first to look for satellites, so that is absolutely critical and also in terms of minerals, mineral discovery companies like one of our portfolio companies, Cobalt, use these satellite image data sources like Well, even in terms of minerals, they are very relevant and, more generally, if We look at the resources, there's an incredible amount of material available in asteroids and to be able to mine some of these other celestial objects, I think some of the numbers I've seen were like a small M-type asteroid could have twice as much nickel and iron as They are produced on Earth in a single year, so a country can do this at scale.

It resolves many of these material components. problems and I think in the long term we will probably see a lot of these, once we start getting a lot of resources from space we could move other high energy intensive industrial activities into space, you don't have to worry about nuclear radiation if you have a nuclear reactor in space and you are doing other type of CO2 emission processes in space, you may be able to do a lot of industrial things and then send them back to Earth, it is not the next long term plan, we have Vijay, Hello.

I'm Vijay Pandey Journal, Partner at Bion Health at a16z and this is my biggest idea. The largest company in the world will be a consumer health technology company. This may seem crazy to some, but why shouldn't it be true? Four of the top five. The world's largest companies are consumer companies, and healthcare is one of the country's largest industries - much larger, in fact, than the size of the global advertising industry in which consumer giants like Google and Meta operate. . From that point of view, the number one position should be consumer health. So we see two paths for the consumer health company to become the largest company in the world.

The first is a vertically integrated path of being a so-called wage fighter, a combined payer and provider that eventually owns most of the care. Imagine United Health Group but with Apple's UI that you wouldn't choose this insurance plan and provider; the second is a horizontal path to build a consumer marketplace or an infrastructure layer that allows all your healthcare companies to imagine Amazon as a Visa, but in healthcare we would go as far as Let's say there is almost infinite space to improve the consumer experience in the healthcare sector and as a result build massive companies and we expect consumer healthcare to be front and center in 2023.

Alright Vijay, this is a great prediction as well that before getting into the nitty-gritty. -Brave, I want to know from you how big this healthcare industry is, yes actually, people forget how big it is, it's close to 25 of US GDP, it's like 22 right now, it's 20 in 2020 and has been gradually increasing, is what healthcare means. The crisis said that we care and, in that sense, the marketing budget of consumer giants like Google and Meta is 10 times larger. Well, I'm glad you mentioned them because some of these big companies like Google, Apple, Facebook and Amazon are pursuing healthcare to some extent and they have a lot of capital to invest in this nascent space, but to date they haven't been successful.

So why do you think these super-capitalized companies haven't reached the top yet? Yeah, I think there are a couple different ways of thinking. In this regard, from a purely technological perspective, you can imagine the days when Google was fighting against Microsoft, as if something like a small startup known as Google could compete against a giant like Microsoft and it did because they were web natives, they were built. on a different set of rails and with Founders thinking about things differently and even just from a tech company perspective, uh, it's something so different that it's hard for the Giants to pursue it just because of the way they're built and This is basically classic.

Disruption Theory Healthcare is also different than technology that you can't get into. I think a naïve understanding of how healthcare works is on the medical side, the latter scientific side or even just how the system works and goes in and makes big changes. So I think the combination of those two things will make it very difficult for existing incumbents, at least on the technology side, to dominate. Yes, we've covered the incumbents on the technology side, but there are also big healthcare companies today, one that you mentioned was United Health Group, which is the largest healthcare company in the world.

I think they're also the 8th largest company overall, what do you think is stopping them from dominating in the way you're describing well? I think just like we talked about during Tech Companies, I think there's the same problem now for healthcare companies and the winner is going to combine a deep understanding of technology and a deep understanding of healthcare and it's very difficult to turn that into a healthcare company. technology. It's very difficult to turn technology into a healthcare company in the same way, it's just not the way these companies are built, so it's an analogous problem on both sides, so something you seem to be alluding to It is to the fact that we need a new founder. is addressing this problem, so if you were a founder today, what angle would you approach this from?

I think the key is that the founding team would ideally bring together people who have this deep knowledge of technology and healthcare. I think we are now in 2023. We are in a different world where people have grown up with thetechnology your entire life, so whether you are now graduating from medical school or have been working in the healthcare system, technology is not something unknown, it is part of your everyday life. life and it's been a part of your daily life for decades, it's important for us to pay attention to these inflection points, so it seems like technology has changed in a way where there are new opportunities in this space, but I really want to dig deeper. in this idea. that you said there is infinite room to improve the consumer experience in healthcare and I feel like this has been true for quite some time and maybe aside from some of the technical or talent changes, why haven't we Seen many of these?

However, it's actually analogous to some areas of technology where people from consumer backgrounds came to Enterprise and the Enterprise software started to have the appearance of a really fluid user interface that you would expect from meta or Google or something like that and similarly. It just takes a different type of founder to really understand how to create that experience on the technology side, which is the UI, etc., but also MPS is more than just the software, it's about what you can actually do and what you can do. that you can achieve. I bet there really isn't the same focus on user experience in healthcare because, frankly, often the user, the patient, is not the payer, that's really, I think one of the key differences for a consumer facing a healthcare company where they will finally now be. involved in maybe, to some extent, things will come out of your pocket and that will change things, but I still think that someone with a consumer mentality where the patient is really paramount and that the user experience of the patient is maybe even part of how we think about your health.

Careful, that's a fundamental change Vijay I think this is a really interesting concept, but what I hope from this idea of ​​the largest company in the world being in healthcare is that there shouldn't be these massive companies profiting from patients' health, then what would happen? you say that, yes, well, first of all, I think if you think about what a human endeavor should be, caring for the sick is one of the most important things we could do, it's important to realize that a communications company that is very successful. To do that is to create so much value that becoming a big company is a very positive thing overall, but I would also add that there are different ways that companies become big and one is through rent seeking, where they have some advantage that just take it, they take advantage and they don't really contribute or innovate or and this is the spirit that we see in many technology companies where they actually bring enormous degrees of innovation and that innovation is really dramatically improving the patient experience around a dramatically improving the results and as a side effect, this is building the largest company in the world, that is the vision that we would love to build towards where, improving the human condition, improving the way that human health care is looked at is one of the most important things. we could be doing and we would be represented in some sense by the fact that such a large company could be built next.

We have Julie, hello everyone. I'm Julie Yu, general partner of the bio and health team at a16z and this is my big idea for 2023. The value-based care stack, as we said somewhere in the murky middle of the adoption curve and the hype cycle of values-based care or BBC, we are unabashedly optimistic about vbc, but we are also with the wide-eyed eyes that many value-based models have. It has not yet delivered value and one of the main reasons for this is that the clinical and operational models of the legacy fee-for-service world have simply been transplanted to value-based paradigms, resulting in a game of the system versus a fundamental reorientation of care models towards focusing on value from the ground up, so vbc, done right, demands purpose-built approaches that will be built on a fundamentally different stack.

This emerging stack will support new digital healthcare players based on value and similar feedback on unique requirements to deliver higher quality. aspects of value care, such as data aggregation and activation. Actuarial modeling. Management of the contract award panel. Continuing care workflow support and provider ecosystem integration around referrals. Chemo management and network design, just to name a few. So if the first generation of the digital health technology stack we wrote about in 2020 was intended to enable administrative and operational efficiency for early virtual providers, the next generation will seek to help providers take risks and enable payers to collaborate in a more integrated way with their risk-taking provider networks, we see this stack emerging in many different product phenotypes, from SAS platforms to solutions marketplaces and mso to serve a wide range of buyer segments and levels of technical sophistication.

Can you explain to listeners what the difference is between some of the value-based care that you're talking about and the legacy fee for healthcare service systems, of course, the first thing I'll point out is that you would expect to know that All health care you receive is value-based. so it's telling that we had to invent this term to qualify what's value-based and what's not, um, but you know, the premise of value-based care is that you know a lot of the excess of our system of healthcare is the result of the kind of hugely misaligned incentives due to the third-party payment model that is the dominant way healthcare is paid for in this four trillion dollar industry in our country every year and it's probably not even accurate to call to the Legacy fee-for-service system because it is still the dominant model today, but the fee-for-service system is one in which, as the name suggests, providers essentially get paid for what they like, for every visit they make, every test, every procedure they perform.

They're submitting this Atomic claim for each of those tasks and they're getting paid a fee for each of those tasks and as you can imagine, you know that that kind of system incentivizes doing more things and it also incentivizes a kind of focus on dealing with people who are sick as opposed to this value-based system where providers are paid to manage the health of their patient population and prevent disease, you know, versus treating it, the purest form of value-based care. values ​​is where providers effectively get such a budget annually to manage their patient population and you know that any surplus that you have in that budget you have to eat, but also any surplus in that budget you can keep a portion of those savings and again , encourages different attention. model associated with what is, uh, you want to be much more proactive in getting ahead of any escalation of health problems to avoid all of those catastrophic costs that could arise from people actually getting sick and ending up in the Ed and things like that. what you're describing sounds great, it sounds like we're driving efficiency, productivity, we're dealing with illness before it happens, and so what have been the key obstacles to achieving this reality that you're painting?

Yes, I am referring to the fee for the service. has been the dominant payment model for many decades. I think technically it was like the 1960s when the first similar billing codes were implemented that led to this kind of proliferation, so it's fundamentally inherently difficult to change a company's business model. the entire industry, so I think there's an inherent inertia that you know the whole way our system operates has been optimized to pay for service, everyone knows how to play it, everyone knows how to benefit from it, there's a whole industry of about 150 billion dollars dedicated to just filing and processing claims to optimize their revenue stream and so you know that just because there's so much money at stake there's a lot of friction, um, against changing the status quo.

I also compare it to the legal industry where you know everyone. We are familiar with the minute-by-minute billing system that law firms use and how many times have we heard of some upstart law firm that is trying to move away from time-based construction to fix feed construction, but so fast how does it seem. goes away because there's so much inertia in the system and so you know I think it would really have to be like a top down government mandate to force an industry to make that kind of change and even though it's not like that We've had what I would call a full mandate where we've implemented a number of important government initiatives that create financial incentives to get you into the value-based care game for providers and payers and taking full risk as it's called Uh in the form of these, you know , budget-based payment models, um, we've had several examples of that, you know, Medicare Advantage.

I think that's a prime example that was started in 2003. I've had accountable care organizations or acos that were started as part of Obamacare in 2012 and, uh, some later versions of that, so you know, we're still in the early days. , I would say in terms of seeing the impact of those organizations from the top down. mandates, that's really what it took to shake up the system and say there's a different way of doing things, yeah, so it looks like some of those initiatives were over a decade old and so what do you see? today in 2023 that changes whether it is through legislation, through founders who are stepping up to change things or perhaps simply through the step-by-step changes that are occurring to reorient the inertia we have seen in the past, what are you seeing that gives you hope? maybe some of the changes today definitely on a baseline, just the general type, like it takes time for these things to take hold.

I mean, it's the same way we talk about technological change, as if even you knew that the Internet was invented, quote-unquote. widespread basis in the '90s, it's really only now that we're seeing some of the food for that innovation, so I think there are some fundamental physics of love type things like that that apply here, but already You know, I think it has to go away. Needless to say, certainly the pandemic and everything that's happened in the last few years has had a huge impact, frankly, like the financial beating of suppliers that has created this huge boarding platform for suppliers to diversify their income and just They believe much more resilient. ways to survive 5 and value-based payment is a way to do it where you actually have a recurring revenue stream versus these atomic payments that depend on patients coming to your office, so I think it has been a big tailwind for the adoption of value-based care models, you know you also see a lot of decentralization of care away from traditional hospital and clinical settings, you know, virtual care, home care, community care, All of these things are now being adopted largely because they are fundamentally lower cost, you know, they are more convenient and much more reliable than having to force patients to go to these centralized settings, so, you know, I think those are some of the key and obvious drivers of seeing the why now that it is happening.

Right now, you know what I said, I think we're still looking at, depending on what reports you read, you were only at about 20 percent of all healthcare payments in some kind of risk-based model, um, so you already know. to use the chasm crossing framework, we're probably still in sort of an early adopter phase, maybe early majority, but again we go back to that concept that we're still pretty early in, um, in the Fallout kind of some of these top-down government mandates and the impact they can have on the industry, yes, completely, and I think, to your point, the change in inertia doesn't happen immediately.

I like how you have divided the healthcare technology stack into three. parties in the past, so it includes care delivery services, the administrative administrator that is required to run a practice and then the front office that interacts with consumers or clients. Is there a part of that technology stack that you think is really ripe for disruption? today, yes, yes, and just to contextualize what you mentioned, you know we had written a couple of years ago about this new technology stack forthe first virtual care and you know the premise of that thesis was that, all these virtual care startups are very sick. -served by existing IT solutions because those IT solutions were largely fee-for-service based, you know payment is based on sporadic patient encounters at the facility, so your entire data model was based on these types of visits, you know again, these sporadic visits and workflows were basically everything is provider-centric, not patient-centric, so we predicted that there would emerge this new technology stack of horizontal platform companies that are designed to provide value-based care, longitudinal models of continuum of care, and treating the patient as a primary end user, so that came to Bear, you know, the first wave of companies that emerged started to develop what I would call low recruiting capabilities. in that stack, so the operational infrastructure for billing, things like financial services CRM type capabilities, more types of administrative workflows and So, in answer to your question, I think the next wave of innovation will be more focused on the higher levels of sophistication of that stack on the clinical side as well as the risk management type, and then what?

I mean, that's on the clinical side. I think we're all waiting for the promise of things like Ai and ml to help supercharge the way doctors make decisions about patients and give them real-time access. intelligence that is available to us as a society about what works and what doesn't work for a given patient population versus being beholden to you, you know the very heterogeneous distribution of knowledge and experience that inherently exists in any provider population, so I think the clinical aspect of that technology stack is an area that we think is very ripe for innovation, and then I think the risk part, as we were discussing earlier, is that providers basically have to learn new skills if they're going to take risks in these. kind of budget-based payment models, they have to learn to deal with payers in a different way than insurance companies and be able to design and negotiate these contracts in a way that they are successful and also understand their customers again. populations in a fundamentally different way of avoiding these clinical catastrophes that could lead to insolvency under these models, so I think that's another area where things like Actuarial, you know, capabilities, ways of underwriting risks and proactively intervening in populations in a scalable way are going to I know another area where we need to, you know, see innovation within this technology stack, you know, something that you mentioned, is the focus in the past on provider-based care versus patient-based care, Do you see that changing?

Is healthcare becoming more of a direct-to-consumer model or do you think again, using the term inertia that we've had in the existing system where care is focused on a middle layer of provider, do you see that changing? Yeah, I mean, we actually had I wrote a couple of articles recently about this notion of our definition of direct to consumer. I think the traditional interpretation, you know, kind of the common interpretation of that phrase in healthcare has been, you know, out-of-pocket payments where you, as a patient, are paying. For a service, we maintain that the definition is much broader than any service in which the patient has a direct allegiance to an entity that provides a service or facilitates payments, but not necessarily one for which they are paying. out of pocket, so in that sense, absolutely yes, and I think it's a necessary component of value-based care that the patient is involved in their health care because that's really the predominant way in which we can detect risk in an early and so you know that you're hearing about things like remote patient monitoring or continuous measurement where devices are placed in people's homes and you know that they're participating in creating data sets that are novel and that are also they create a whole new dimension of visibility into how patients are doing and I think that's a very prevalent example of how patients are taking on more responsibility and just more involvement in these models of care, so yeah, I would definitely expand the definition of direct to the consumer beyond what is usually thought of in the sense of e-commerce, that is, one in which patients are aware that you know about the services they receive and bring novel insights and data sets to ensure that your suppliers can succeed effectively.

In these types of value-based orientations, I've also heard you talk about the growing affinity that consumers sometimes have with some of these companies that are building a closer relationship, even if the consumer is not the direct payer for that service. Talk to maybe just one or two examples of companies that have been able to successfully facilitate this. The first company that comes to mind is Firefly Health, which is a value-based care company, so you know many of the examples I mentioned above. we were in the government-sponsored insurance space Medicare Medicaid, etc., one of the areas that we believe is extremely ripe for value-based care.

Innovation is the commercial insurance space, so employers sponsored the insurance in particular in this case, so Firefly is effectively selling an employer solution that helps employers manage their healthcare expenses in a much better way. effective and as we all know, insurance premiums continue to skyrocket year after year and especially given the macro environment right now. You know, this is just a hot issue on the platform for CFOs and CEOs across the board, so Firefly is inserting itself into that equation, but the way they manage their patient populations is through a concierge type model. where you can literally text meeting their staff in real time, 24/7, and be able to have clinically meaningful encounters with that staff above all. from the appointment, you know, the schedule to the pharmacy, it just needs questions about whether I need to take my child to the clinic or not and everything else and the phenomenal statistic that I always highlight for Firefly, in fact, I will ask you this question, Steph, how many?

How do you know that all of us typically see our primary care doctor maybe once a year at most? How many annual meetings do you think are clinically significant? Do you think Firefly is on average with its patient population? Well, now I feel like it's high because I feel like it's more than one, but this is per patient, you said yes, I guess guess three, so 45, what are the 45 clinically significant interactions that you have annually with your patient population. You know they are commercially insured, so these are people who have full-time jobs where they receive health care benefits, so you're typically talking about a much healthier population than you would see in populations like Medicare or Medicaid , and so, because of That context it's even more phenomenal because they're getting that level of engagement, but you know, they use this modality of texting.

They carry out proactive outreach activities with their patients. They also provide remote monitoring devices. They will send providers to your homes when necessary. be a sort of hands-on intervention on the body to do some sort of assessment or treatment, so because they're taking this multimodal approach to providing primary care, they can earn the right, you know, to have these very frequent touches. points with their membership population, which not only helps with kind of a fair consumer experience, frankly, and, uh, developing loyalty to them, but also, obviously, from a clinical lens that allowed their physicians to be really proactive in highlighting opportunities you know to intervene early in their care.

Journey so that for me is kind of a prime example of the way that you can implement the use of technology in really systematic ways and not just relying on throwing bodies at the problem like traditional vendors have done and you know, what which is obviously inherently non-scalable. Being able to, you know, provide a pleasant patient experience and at the same time provide clinical outcomes and lower cost, that's crazy, 45 versus, like I think you said, less than one encounter for most people and I guess the price of that is much lower. also through the facilitation of technology and that is exactly right, the idea here is that only because of the technology that exists now to be able to facilitate multimodal care, that is, virtual care, home care in your community and you know when it is necessary. you know it will guide you toward in-person care because they can diversify the care sites where they can provide their services.

The cost structure of your clinic compared to a traditional clinic is a fraction of right, so ultimately, I would highlight that another key factor and key unlock to making value-based care work is the ability to fundamentally reduce the cost structure of care delivery and, I would like to tell you, I would go so far as to say that it is not even possible to do that without the technology that we have today, whether it be mobile, whether it be these connected devices, etc. and even, frankly, the adoption of technology among vendors that didn't exist until very recently for better or worse and their ability to communicate directly with each other. as they're collectively managing these patients in these budget-based risk models, then you know that's absolutely a critical part of the unlocking that you know Firefly and many other companies have been able to take advantage of.

I hope you enjoyed. this two part series and if you are looking for the full list of 40+ ideas you can visit a16c.com and you will find it on the home page. See you next time, thanks for listening to the a16z podcast. If you like this episode, don't forget to subscribe here on YouTube to get our exclusive video content. See you next time.