[00:00:00 – 00:00:08] Nitin Bajaj

Hey, everyone. Welcome to the Industry Show. I’m your host, Nitin Bajaj. And joining me today is Amit Garg. Amit, welcome on the show.

[00:00:08 – 00:00:10] Amit Garg

Nitin, thank you so much. It’s an honor to be here.

[00:00:11 – 00:00:14] Nitin Bajaj

It’s great to have you here. Let’s start with the big question. Who is Amit?

[00:00:16 – 00:00:30] Amit Garg

Many things, but for the conversation today, I’m a co-founder, managing partner of Tau Ventures. We’re an early stage VC fund in the heart of Silicon Valley. We are managing just shy of 100 million. We focus on AI applied to healthcare and enterprise.

[00:00:31 – 00:00:56] Nitin Bajaj

Love that. And you went a little heavy on the professional side. We love to get a sense for the personal side, but I’m sure over the next few minutes we’ll get to unlock that side also. Tell us why, Tau Ventures, you could have done many different things. You have an amazing background and lots of experiences. Why start a fund and why do it now?

[00:00:57 – 00:02:56] Amit Garg

Thanks for the kind words, Nitin. We started this fund just over six years ago. It is the output of a lot of thinking, a lot of planning, a lot of plotting. My co-founder and I used to work together at another big VC fund. That was 10 years before starting TAL. And we have been talking about doing something together and specifically doing something together around AI. We’re both technical people who have started companies, who have built over careers in Silicon Valley. And we saw that AI had been surfacing up really in a big way. We saw that inflection point coming and we felt we owed it to ourselves, really, to the world to start a fund that would help capitalize on what was happening on this innovation. So when we started in 2019, I kid you not, we actually got the question, Do you think this is a big enough thesis? Nobody asked that anymore. And we focus specifically on AI applied to the verticals we are very familiar with. In my case, it’s digital health. I built my career in it. I’ve been a founder in digital health. I’ve been an investor in digital health. I almost in a slightly different life, but have become a doctor. I’ve studied at the intersection of life sciences and engineering. And I just think that there’s so much that technology can do to make healthcare truly healthcare. What we have today is sick care. Globally. And in the US, we have an empire of bureaucracy. Bureaucracy, Raj. I think technology can solve all those problems, but it can mitigate many of them and it can help ultimately better care for all of us. All of us are patients at the end of the day. So we started the fund with these goals that let’s do good, let’s do well, let’s promote innovation that truly makes a difference. And today we have done just over 80 investments where three different vehicles. We’ve had a number of exits and I can go on and on if you’re interested in about the metrics. But the point that I have is we’re very passionate about how can we apply technology to do good and do well. That’s the ultimate goal behind Taaventures.

[00:02:57 – 00:03:25] Nitin Bajaj

Great timing, great vision. And you started to touch upon the impact of what you’ve been able to accomplish in six relatively short years. So tell us a bit more about that in terms of, you mentioned the two verticals you specifically invest in. Give us a sense for what through your fund, through the work you and your team have done, a sense of that impact you’ve created.

[00:03:25 – 00:05:38] Amit Garg

Sure. So let me speak a quick word about the team. It has grown over time. So today, my co-founder Sanjay, he focuses more on enterprise. I focus more on digital health. Occasionally we’ll look at each other’s expertises for various reasons. We also have three other colleagues now on board full time. We have two venture partners. These are people who are more senior to us who are investors in the fund. That was not a requirement, but they help us actively with finding companies, helping companies, making investments and so on. And then we have a really big community around us of investors, advisors, founders. So one impact that I have for you is we have done just over 80 investments. That’s been a pace of just about one a month, actually a little bit more than one a month. And we have had three different vehicles. A first fund, we call it Fund 1, a second fund, which we call Fund 2, and in between those two, we have raised an opportunity fund. And not to get too technical here, but opportunity fund has slightly different goals than Fund 1 and Fund 2. That’s why we have a different terminology. But one metric that I have is we’ve calculated the amount of market cap generated by all these companies. And I’m excluding all the companies that have IPO’d. If you add them up, the number is humongous. But even just the private companies, we’re talking about just about 5 billion in valuation, collective valuation. We’re talking about over 2,000 jobs. We’re talking about 13 exits right now, like companies of ours that have been sold. I dare say there’s something here that we’re doing that is that’s moving the needle. It’s obviously not moving the needle everywhere for everyone, but it’s moving the needle for those companies that we work closely with. And we really believe that we should be stewards of the trust that society has put into us. So whenever we engage with a company, even if we end up not investing, we try to do something to be helpful to them. If we engage more and more, we do more and more to be helpful to them. And even when we don’t invest, we welcome everyone to come and join our events where we get investors, partners, customers, corporates, everyone together. So I’m extending that invite to Unithin, I’m extending that invite to all of our listeners today. If you want to find out more, you can go on www.Tauventures.com, there’s a sign up there for our newsletter.

[00:05:39 – 00:06:22] Nitin Bajaj

Love that. You mentioned so many different things that are close to my heart. That’s why we have this question about impact. You mentioned the one that is I would say maybe a leading metric for people in this community of investments and fundraising. 13 exits in 80 investments. That’s phenomenal by any standard. So kudos to you and the team for doing what you do. But as I said, the real impact is in the jobs you’ve created, in the lives you’re helping improve through healthcare, through enterprise. So many congratulations to you. To you and the team to be able to do this in six very short years. So that’s amazing.

[00:06:22 – 00:06:42] Amit Garg

Thank you. Very kind. It’s always a team sport. We are not, we of ourselves are a team and we’re working with many other teams. And I think that’s the beauty of why we were able to come out of caves and have the Zoom call. As humans, we are good at collaborating. The more we collaborate with each other, one plus one becomes 11.

[00:06:42 – 00:07:10] Nitin Bajaj

I so agree with that. Now, as you go through a myriad of these opportunities in two very broad, especially challenging, especially bureaucratic domains and industries, I’m sure you face a lot of different challenges. You, the team, and the portfolio companies. Given your lens, if you had to call out the one big challenge, What would that be?

[00:07:12 – 00:08:29] Amit Garg

One big challenge across all companies. Let me focus on digital health because that’s what I spend more of my time. And this is a challenge in healthcare overall. It’s sales cycle. So you may have an incredible solution, but it’s also interfacing with people’s lives. So you need proof points. No payer or provider or pharma, the piece of healthcare, by the way, or patient. Once an untested solution. The bar for getting it right has to be high. And I’m not talking even about regulatory approval. We don’t invest by and large in regulated companies. 95% plus of our companies are software solutions that have no regulation. But still, you need to make sure that you’re saving costs, or you’re creating revenues, or you’re creating efficiencies, or you’re 10X better in some ways. Anybody who is buying your solution, your product, needs to see that. So the sales cycle typically is months, if not years. And some providers, AKA hospitals and other people affiliated with hospitals, they may sign up within even one to two months, more commonly three to six months. Payers, meaning insurances, they will typically sign up with you within nine months, maybe 18 months even. Obviously, there’s a huge variety. Some people who are very early adopters, middle adopters, late adopters. It’s true in any industry you look at.

[00:08:29 – 00:08:29] Nitin Bajaj

But what I see in healthcare often.

[00:08:29 – 00:09:11] Amit Garg

Digital health specifically, is that It’s hard to get started. It’s hard to get the engine going. Once you get to the series A and you start getting 1 to 2 million ARR, the road starts getting clear. And by the time you hit series B, you are able to scale better. There’s almost inherently built to defensibility. And inherently, there’s something to be said about inertia. So if I were to put a framework, it would be digital health. Perhaps harder than get started than other verticals. But once you’re actually there, once you go from zero to one, perhaps relatively speaking easier to go from one to 100.

[00:09:13 – 00:09:26] Nitin Bajaj

That’s a great piece of wisdom to share there from the learnings you’ve had. Now, as you talk about the challenges and look into the future, what’s the one big opportunity that you’re most excited about?

[00:09:28 – 00:12:26] Amit Garg

I want to tell you not one, but thousands of things I’m excited about, but I’m going to pick one just to be honorable with your question. It’s one that’s perhaps boring to most of us because it’s not the kind of stuff that makes it to the headlines, but I want less paperwork. I want us to fill less forms. I want the nurses and the doctors and the insurance people and everybody involved in care. In the back office, in the front office, all of us to do less paperwork. Healthcare is today sick care with a lot of shuffling back and forth. Let me put some numbers here. It’s just over 18% of our GDP. It’s almost twice the average of other developed countries. It’s not just that we are a big country. We’re actually twice as inefficient as most other developed countries. It is an industry in the US at least that is the worst in terms of white collar industry in terms of inefficiencies. We have more people working in healthcare in just sending paperwork back and forth than any other industry in the country. Not even financial banking, et cetera, is as inefficient. I worry even that we’re more inefficient than Congress, which is saying something. Yeah, our healthcare costs are completely out of whack and we actually have worse outcomes than other developed countries. As an example, Japan is on the other end of the spectrum. It’s about 4% to 5% of the GDP and they live longer and healthier than us. So something we’re doing clearly wrong in this country. We spend more money when we shouldn’t, we spend less money when we should. We spend a lot of time and energy just doing things that are not needed. So I’m excited about eGenetic Healthcare. That’s the latest term. I used to call it the back end of healthcare, but I’m talking about prior auth, I’m talking about clinical authorizations, I’m talking about price transparency, I’m talking about benefits management, I’m talking about coding, CPT codes, home coding, I’m talking about all the things that are in many ways enterprise challenges more specific to healthcare. We have a number of companies that do this. We have a company called Sort Health that had some great news literally last month. People who want to learn more, you can Google it up. This is a company to help you with call scheduling. Literally, that’s a problem that should blow your mind why it’s such a big problem. On average in the US, it takes 34 minutes for you to set up an appointment with your physician. This is not to see the physician 34 minutes. This is 34 minutes in order to schedule a time to see your physician. This is insane. It’s absolutely insane. That’s the problem that this company solves. And we have a number of others that solve problems like this. I’m really excited about the power of AI because AI, it’s a very powerful tool and it can reduce the grunt work. You may not be able to eliminate it completely, but it can make things much less inefficient.

[00:12:28 – 00:13:01] Nitin Bajaj

You’re speaking about it. Obviously, the passion comes through, the future comes through. It is indeed, I would even call it depressing and sad, the state of affairs today. But I’m glad someone like you and the teams and the companies you have in your portfolio are looking at this and I see the change coming through pretty soon. So thank you again for doing what you do. It’s in many ways a thankless job, but hopefully this comes to fruition sooner than later. And we can all benefit from it.

[00:13:01 – 00:13:25] Amit Garg

Thanks, Nitin. Very kind of you. This is not false modesty, but once again, team sports and the superstars here are the founders. The metaphor I have is you need both a coach and a founder to succeed, right? To coach and a player to succeed and win the game. But the guy who’s really sweating on the court is other founders, right? Yes, undeniably have a role to play here. Undeniably, my role is very important, but I want to give due credit where it’s due.

[00:13:25 – 00:13:25] Nitin Bajaj

The founders, the management, the team, the.

[00:13:25 – 00:13:25] Amit Garg

Employees, they put the sweat, their tears.

[00:13:25 – 00:13:25] Nitin Bajaj

Their toil into building.

[00:13:32 – 00:13:35] Amit Garg

In solving thankless problems with thankful solutions.

[00:13:36 – 00:13:57] Nitin Bajaj

Indeed. And as you rightly said, it’s a team effort. And I’m sure they also get a lot from the vision, the holistic view that you get through all of the different portfolio companies and your own background and passion for this as you help them dig through the challenges and focus on the solutions that they help bring to life. Great team effort.

[00:13:59 – 00:14:00] Amit Garg

Thank you.

[00:14:01 – 00:14:22] Nitin Bajaj

Now, as we look forward into the future, I want to pause and reflect and ask you to share two moments from your life and career where one, things did not work out as you had expected. There was disappointment, failures, lessons, and another where things exceeded your own expectations and became a success beyond your imagination.

[00:14:24 – 00:17:32] Amit Garg

Oh boy, that happens on a daily basis, isn’t it, Ben? I like to say that the Book of Failures is not even a dictionary or a Bible. It’s a set of Bibles, encyclopedias that mostly only I know. It makes for great reading, but it’s mostly a reading that I know. The success is easy to talk about, right? It’s what society often values. We have invested in, I’ll focus here on Tau Ventures specifically. We are invested in a number of companies that went through roller coasters and for some time it looked that roller coaster would not continue, that it would plunge into an abyss. But yet for many reasons they pulled it off. I’ll talk about one example here that’s been a long time ago, but folks here might remember this little thing called COVID. When COVID happened, one of our companies basically had a term sheet, but it got pulled under them. A lot of uncertainty, it’s not common, but it happens and they ran out of money. And I’m sure I can talk about this publicly now because it’s been five years, but the company’s called Totem and the founders are James Siegler and Denise Goral. These guys are steam engines. When the roller coaster was plunging into their business, they figured out a way. They convinced everybody in the team to stay. 21 people, I think one person ended up leaving for personal reasons, but 21 people worked almost for six months for no cash, no pay, continued day in and day out trying to get it right. And they were building monoclonal antibodies, so helping with cancer, helping with COVID very meaningful stuff. We saw their commitment. We didn’t have that much money at that point in time, especially. But what we did is we found others who did within our network of our own investors and co-investors. And so we brought in an injection of capital. We saw what they were doing and we thought, this is a team that deserves support. And they pulled it off. That injection of capital allowed them to restabilize. A year later, they managed to find a great buyer. A month later, the buyer went IPO. And what was looking like it was going to be a doom spiral ended up being a success. And success can be defined in many ways. Success can be defined economically. Success can be defined by taking an innovation to market. So in my view, definitely a success. And once again, mostly kudos here to James, Denis, and the team. So that’s the save that you were talking about. In terms of the other way, something that looked like it was going to succeed really and then ended up not, I think I have to pick on myself. There’s so many things that I’ve managed to do that I, based on what I knew at the time was the right call, but now looking back, it doesn’t make sense. I should have taken a different decision. I’m going to pick on something more personal here, which is I What you’re seeing right now is Amit 2.0. Amit 2.0 is 35 pounds lighter than Amit 1.0. I probably added 10 years to my life. I was on the road path here to being perhaps hypertensive, diabetic, having a big belly, and so on without realizing it. I think like most probably men in their 30s, I thought I could just eat my way, whatever, and exercise my way out of whatever.

[00:17:32 – 00:17:32] Nitin Bajaj

That’s not true.

[00:17:35 – 00:18:18] Amit Garg

So I realized this when I became a founder and my co-founders and I all said, look, if you’re going to build a digital health company, we should all actually be healthy of ourselves. And I was absolutely shocked to realize that me being so conscious of our health was actually by far the worst. So I took it upon myself to improve myself. And the failure that I want to point out to you is that for almost 30 years, I thought I was doing the things right. I wasn’t right. I thought that I knew how to be healthy and I really didn’t. I lacked the full wisdom, the full information even. My note to everyone is, if you think you know everything, you don’t. The more you realize you don’t know enough.

[00:18:19 – 00:18:36] Nitin Bajaj

Well, first off, thank you for being vulnerable and transparent and calling yourself out. It’s not easy, but congratulations on making the switch. And as we continue this conversation over many months and years, I will dig deeper into that.

[00:18:37 – 00:18:45] Amit Garg

I’ve written some articles about this. I’ve been public about it. You can read up my articles on how to get healthy, on how not to be stupid like I was.

[00:18:45 – 00:19:43] Nitin Bajaj

Yeah. And I would love to share that with the community so other people can learn and be enlightened without having to make those same mistakes. So thank you for documenting those. And also in your previous point in terms of the success and its definition, I think the third kind of and the most important one to me is in the belief you have in the people that you surround yourself with. So, believing in that team and continuing to invest in them, whether in monetary ways or even just in terms of the moral support, like you said, you brought others in that infused that capital I think that to me goes a long way irrespective of what the material outcomes of that input was. So kudos again to you and the rest of the team for believing that these guys that had invested six months of their own time and effort without knowing they’ll get ever paid. That’s huge. To me, that’s the biggest win.

[00:19:44 – 00:20:05] Amit Garg

Thanks, Nitin. And I think you said it better than I could. At the end of the day, It’s people believing in people working with people, right? You can do all kinds of analysis and you should to be able to justify a decision, to be able to understand the risks, quantify the risks. But at the end of the day, all human endeavors are people working with people.

[00:20:06 – 00:20:14] Nitin Bajaj

True. Now, as we get somewhat philosophical about this, I would love to change gears and ask, what do you do for fun?

[00:20:16 – 00:21:53] Amit Garg

At the moment, it’s taking care of a newborn. But let me leave that one to the side because it’s very recent. Normally, I would say, and I still continue committed to this, it’s taking care of my own health. I exercise on a daily basis, even if it’s just something small. Go for a run, go for a swim, lift weights. You may argue that working out is maybe not fun, but I do consider it fun. I actually look at it as a moment to take care of myself, to relax, to meditate, to take care of these muscles and be healthy and be here for the long run, hopefully, to be able to contribute to society, to my family, to everyone. So that’s one thing. And I know that this may not sound necessarily like fun, the definition of fun, but I do see it as very meaningful. I’ve been doing a nonprofit now for 25 years. It’s a long story, but the short of it is I took a backpack and I went into rural India, middle of nowhere. It’s not where I’m from. I grew up in Brazil. But I continued that work once coming back to the US. And long story once again, we have Crowdfund and built a hospital. I don’t spend that much time on the project at this point. It doesn’t need me as much, but I still stay engaged alongside four others. We’re a team of five. And that brings me a lot of meaning to all my endeavors and helps me inform what I do professionally. It’s called Hospital for Hope for anybody who wants to learn more, hospitalforhope. org. And then the third thing I would do for fun is all the usuals, right? Watch Netflix, hang out with friends, family, obviously family and friends, eat well, et cetera, et cetera. Those are the usuals. Very ordinary, very ordinary things.

[00:21:54 – 00:22:21] Nitin Bajaj

Yeah. And it’s the ordinary is what makes it fun, right? It doesn’t have to be super exclusive, stressful as to what new exciting thing I’m going to come up with. So there’s a beauty in the simplicity of it. And first off, congratulations again. Being a parent is, as we discussed, the most painful and joyful things at the same time. So love that you’re going through the motions of lack of sleep and all the fun stuff that comes along.

[00:22:21 – 00:22:22] Amit Garg

Yep to all of that.

[00:22:24 – 00:22:53] Nitin Bajaj

And my definition of having fun is in the gym, getting the sweat out and just spending time on yourself. So, I think we have a shared perspective on that. Now, as you think through a lot of these things, life in general, purpose, mission, teamwork, are there books and podcasts that influence you? And if so, is there one you would like to share and recommend?

[00:22:54 – 00:22:58] Amit Garg

There’s this podcast called the Industry Show. Maybe I’ve heard of it.

[00:22:58 – 00:22:59] Nitin Bajaj

Probably not. Yeah, probably not. No, I don’t know. You have one yourself.

[00:22:59 – 00:23:59] Amit Garg

Fair enough. You should check out that episode from this Tal Ventures guy on the industry podcast. It’s very meta. I’m promoting it on the podcast. No, but Nitin, to your point, I think there’s so much information out there at this point that’s an explosion of knowledge. There’s many ways of gaining that knowledge. Some people like podcasts, some people like reading, some people like snippets, some people like memes. I think many different paths work. There’s not one single path that’s better. For me, it’s what really works is reading. I enjoy reading books because then you can go deeper into a particular topic. And if it’s something that’s more current, then obviously you read shorter blogs or articles that are more updated more frequently. But I may not be reading just right now as much because newborn, but in general, I try to read, I say, I don’t know, like 50 books a year or something like that on average, one a week. And I’ll pick up on topics that interest me.

[00:23:59 – 00:23:59] Nitin Bajaj

So.

[00:24:01 – 00:24:50] Amit Garg

Something about venture capital and startups or digital health or fitness or healthcare and occasionally obviously different things also. I just finished, the last book I finished was called the Empire of AI, which is the journey of ChatGPT and OpenAI and really phenomenally written. So I’m not recommending any one specific book, but I’m recommending if you do like to read, maybe also have a goal, right? I’m going to read X by Why right could be a book a week or could be a book a month whatever works for you. I’m not proselytizing here that you should have this one specific goal, but I think having a goal keeps you honest. So my goal is on average I’m not saying every week I read but on average right there’s weeks during a break a winter break where I will read two or three books in a week and there’ll be two or three weeks. I won’t read anything.

[00:24:51 – 00:25:00] Nitin Bajaj

Love that. Thanks for sharing. Now on to my favorite part of the show. Amit, I would love for you to share your one-line life lessons with us.

[00:25:01 – 00:25:49] Amit Garg

Oh boy, I’m too young to give life lessons, Nitin. I hope I’m too young. I think the older I get, the more I realize that there’s more to be learned, what we were alluding to before. So it’s just be open-minded. I think I’m pretty good at what I do. I’ve been told by many people of what I do, I’m pretty good at. But this always scope for improvement. And venture capital specifically is one of those areas where It’s always about unlearning and learning. I’m inherently discovering new things and discovering new ways. What I think is true today may not be true tomorrow. The assumptions change. What I think is a truth today may be partially true tomorrow, maybe completely false tomorrow. So being open-minded to frame and reframe, I think that’s pretty critical. And in the decisions we make, we may make a decision today one way, but that decision may be different tomorrow.

[00:25:49 – 00:25:49] Nitin Bajaj

Because circumstances will change.

[00:25:55 – 00:26:01] Amit Garg

I’m not sure if I’m saying anything that hasn’t been said before, but I’m saying be a lifelong learner, right?

[00:26:02 – 00:26:23] Nitin Bajaj

Love that. Amit, thank you again for making time to share your journey, your story, and your life lessons. Congratulations again on parenthood and also the many successes that are coming along with the investments, with the team. And would love to bring you back on and talk about more of these stories.

[00:26:24 – 00:26:26] Amit Garg

It’ll be an honor. Thank you for having me, Nitin.