Epic Systems, every mention
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Verbatim, from the transcripts: the passages where Epic Systems comes up
10 Years of Acquired (with Michael Lewis) · Acquired
- ▶ 27:02 Ben Gilbert Not all of it, but like, you know, we make epic systems about healthcare, and all the people who listen to LVMH are now learning how doctor's office IT works.
Google Part III: The AI Company. Google is amazingly well-positioned... will they win in AI? (Audio) · Acquired
- ▶ 1:48:57 Ben Gilbert Yeah, I mean, it was probably them or Epic.
Google Part I: Origins of Search. How the Best Business in Human History Happened (Audio) · Acquired
- ▶ 50:03 David Rosenthal Judy Faulkner wrote Epic on a DEC minicomputer, right?
The Steve Ballmer Interview · Acquired
- ▶ 44:18 Ben Gilbert We talked about it a lot in our Microsoft episode and then in our Epic episode.
Epic Systems (MyChart) · Acquired
- ▶ 0:48 Ben Gilbert Listeners, today's episode is about a quiet company in rural Wisconsin that plays an enormous role in our lives, Epic Systems.
- ▶ 0:58 Ben Gilbert Yes, you probably know them from their medical patient software MyChart that, if you're listening to this, you most likely use.
- ▶ 1:06 Ben Gilbert Epic is a very unusual company in so many ways.
- ▶ 1:09 Ben Gilbert They do no marketing.
- ▶ 1:11 Ben Gilbert They basically don't do any sales either.
- ▶ 1:13 Ben Gilbert They often say no to potential customers who approach them.
- ▶ 1:16 Ben Gilbert They don't negotiate.
- ▶ 1:18 Ben Gilbert They never raised any venture capital, and they've never done any acquisitions in their 47 years of existence.
- ▶ 1:23 Ben Gilbert They don't work remotely.
- ▶ 1:27 Ben Gilbert They notoriously have one gigantic campus on a farm with buildings designed to look like the land of Oz, a wizard's academy, a treehouse, a barn.
- ▶ 1:42 Ben Gilbert They have the majority of the U.S.'s major hospital systems using their software and of their over 600 customers, they have never lost a single one.
- ▶ 1:51 David Rosenthal Yeah, that is the craziest thing to me about this company is 47 years old.
- ▶ 1:55 David Rosenthal They have never lost a customer.
- ▶ 1:59 David Rosenthal They lost one customer once for six months.
- ▶ 2:10 Ben Gilbert You probably don't know much about her or the company because the company is still privately held, and Judy and her family foundation own about half of it.
- ▶ 2:18 Ben Gilbert Despite being large, and I think at this point they're close to six billion in revenue and over 14,000 employees, they have a stated goal to never go public and never be acquired.
- ▶ 2:39 David Rosenthal Yes, we heard all sorts of stories about companies sniffing around Epic over the years trying to buy the GE, Microsoft, Google, you know, everybody you would imagine wants to buy this company, and it's never gonna happen.
- ▶ 3:33 Ben Gilbert So rather than trying to eat that whole elephant today and unpack the entire system, today's episode is about understanding Epic's role within it and how Epic became so dominant.
- ▶ 3:43 David Rosenthal And if you want to understand the system, you have to understand Epic.
- ▶ 5:17 Ben Gilbert David and I may have investments in the companies that we discuss, although not Epic, and this show is for information and entertainment purposes only.
- ▶ 6:21 David Rosenthal Microsoft and Epic, Intel, and all of this.
- ▶ 8:01 Ben Gilbert Because in everything that I read about Epic, and you and I basically read everything you possibly can read about Epic that's out there on the internet.
- ▶ 8:29 David Rosenthal The company actually confirmed this to us.
- ▶ 11:20 David Rosenthal Well, Jobs and Gates, well, the reason I said Gates is to sort of foreshadow some Microsoftian DNA and analogies that come into Epic here.
- ▶ 11:30 Ben Gilbert She is going to build her company in almost the exact same time frame that Apple and Microsoft were built.
- ▶ 15:35 David Rosenthal And this is the origin of Epic.
- ▶ 30:33 David Rosenthal And Epic still uses Mumps today, or actually it uses its
- ▶ 30:46 Ben Gilbert Uh, I don't know about the industry, but for Epic.
- ▶ 30:52 David Rosenthal Many of Epic's competitors do not use this, but Epic does.
- ▶ 32:47 David Rosenthal And for folks in the industry, that'll sound very familiar because Meditech is still in business today and is the number three player in the EMR space behind Epic and Cerner.
- ▶ 34:25 David Rosenthal And that code in that database is still the core of Epic to this very day.
- ▶ 34:36 David Rosenthal Now I'm sure that is true, but it is true that Epic's core database, the core single database, and this is Epic's big differentiation.
- ▶ 34:50 David Rosenthal It directly talks to whether it's the clinical side for EMRs, whether it's the billing side with the Resolute module that Epic has, whether it's Cosmos, whether it's Stork for OB-GYN, or Beans for Kidney, or whatever application that Epic…
- ▶ 37:29 David Rosenthal The future Epic Systems.
- ▶ 41:10 David Rosenthal We talked about this a lot on our Microsoft episodes, but the critical thing about mini computers and especially for duty here and fledgling Epic was like a consumer wouldn't buy these things, but small businesses could and small…
- ▶ 41:38 David Rosenthal And Judy needs to buy one, and she also needs to fund the company.
- ▶ 41:42 David Rosenthal So she goes to the bank, and she gets a bank loan for 70,000 dollars to finance going and buying the Data General Eclipse mini computer, and then she rounds up a bunch of friends and family and other people, whether physicians or other…
- ▶ 42:08 David Rosenthal They value the company at 70,000 dollars.
- ▶ 42:28 David Rosenthal And those were the only primary investors ever in Epic Systems.
- ▶ 42:41 David Rosenthal The company has bought a lot of them back, but not all of them.
- ▶ 43:05 Ben Gilbert Almost the only way in which Epic intersected with Silicon Valley in the entire company's history.
- ▶ 43:11 Ben Gilbert They do 5.7 billion dollars in revenue today.
- ▶ 43:15 Ben Gilbert They dominate an industry, at least here in the United States.
- ▶ 43:19 Ben Gilbert And in total, they raise 70,000 of equity capital and 70,000 of bank debt.
- ▶ 43:55 David Rosenthal They had kind of a cornered resource as a startup, you know, Microsoft did in Bill Gates and Paul Allen too, but Epic totally did too in Judy.
- ▶ 44:08 David Rosenthal No, and the company stayed very, very small for a very long time.
- ▶ 44:12 Ben Gilbert Cause as legend has it, it's three halftime people in the basement of a building that started the company.
- ▶ 44:33 David Rosenthal Judy gets the company's first office space in the basement of an apartment building at 2020 University Avenue in Madison, Wisconsin.
- ▶ 44:57 Ben Gilbert David, there's only so much material out there on this company.
- ▶ 45:19 Ben Gilbert The crazy thing is, I think when American Girl moved out, Epic bought some of their furniture.
- ▶ 46:06 David Rosenthal Okay, back to the epic story.
- ▶ 46:45 Ben Gilbert And it's not true, but it kind of rounds to true to say Epic basically never did hire any business people.
- ▶ 47:02 Ben Gilbert That is the DNA of the company to this day.
- ▶ 47:15 David Rosenthal This is a history turns on a knife point moment for Epic and Judy because the likelihood that she would get introduced to a business mentor who is also a software developer and not a business school graduate business guy.
- ▶ 48:43 David Rosenthal Totally natural that Judy's gonna do the same thing at Epic out of first the University of Wisconsin and then other schools.
- ▶ 48:50 David Rosenthal But yeah, that was the playbook, and that DNA runs right through to this very day at Epic.
- ▶ 49:42 Ben Gilbert Epic was doing the same thing, and this was not industry standard.
- ▶ 51:16 Ben Gilbert That is where she's about to point the company.
- ▶ 52:11 David Rosenthal It definitely was not a declaration of aspirations as a company, because this was still a very, very small business.
- ▶ 52:19 David Rosenthal They started with four initial customers in 1983 when they changed the name.
- ▶ 52:23 David Rosenthal They only have nine customers.
- ▶ 52:26 David Rosenthal By the end of the company's first decade of existence, so end of 1988, they only have 24 customers, and it's only doing one and a half million dollars in revenue, and they've got like a handful of employees.
- ▶ 52:59 David Rosenthal So yeah, for the first 10 years of the company, you know, yes, it's growing, but it's not exactly setting the world on fire.
- ▶ 53:12 David Rosenthal The other big reason why they weren't getting crazy customer adoption is they actually were only doing the clinical medical record stuff at this point in time.
- ▶ 53:20 David Rosenthal They weren't
- ▶ 53:28 David Rosenthal Eight years of the company, they weren't addressing the actual critical problem in the hospitals, which is help us bill for this stuff.
- ▶ 53:42 David Rosenthal So in 1987, they launch a billing module called Resolute, again, on top of the Chronicles.
- ▶ 53:49 David Rosenthal Single core database, which still today is the company's revenue cycle application for all their hospitals.
- ▶ 54:08 David Rosenthal I think that is actually the single biggest reason why Epic wins over their competitors.
- ▶ 54:16 Ben Gilbert I would argue there's two big reasons Epic wins today.
- ▶ 54:39 Ben Gilbert Epic's just been epic the whole time.
- ▶ 56:46 Ben Gilbert So there's a great substack called Health API Guy, which I want to reference a few times because it's just some of the best writing on Epic you'll find.
- ▶ 56:54 Ben Gilbert Epic becomes the natural choice for enterprise decision makers
- ▶ 57:01 Ben Gilbert Rather than managing multiple vendors and systems, buyers get a comprehensive platform with a single database, unified workflows, and built-in operability through Care Everywhere, which we'll talk about later, but Care Everywhere is the…
- ▶ 57:43 David Rosenthal The market really starts to take off for Epic.
- ▶ 58:00 Ben Gilbert Epic definitely says that that is true.
- ▶ 59:28 Ben Gilbert Pretty amazing product that is trajectory-changing for the company.
- ▶ 59:38 David Rosenthal So by 1995, they hit eighteen million in revenue, up from one and a half million in 1988.
- ▶ 1:00:03 Ben Gilbert This company was started.
- ▶ 1:00:10 Ben Gilbert In 1995, Epic did eighteen million dollars.
- ▶ 1:00:43 David Rosenthal Well, I think I want to come back to it later in the episode and in analysis because yes, Epic is and always will be constrained by being a vertical software provider instead of a horizontal software provider like Microsoft or Google or…
- ▶ 1:01:03 David Rosenthal However, the one industry that they operate in is 18% of American GDP.
- ▶ 1:01:12 David Rosenthal Okay, so then finally in 2001, they launch the inpatient version of Epicare.
- ▶ 1:02:10 Ben Gilbert And Epic is really starting to get religion around this point in our future is breadth.
- ▶ 1:02:27 Ben Gilbert So we need to continue to orient the company around that philosophy.
- ▶ 1:02:38 David Rosenthal Epic also launches MyChart.
- ▶ 1:03:07 David Rosenthal No, Epic launched this in the year 2000, which is wild.
- ▶ 1:03:15 David Rosenthal It's absolutely wild that they launched this and that their customers launched this.
- ▶ 1:03:36 David Rosenthal Well, I want to come back in a minute to how important this is for Epic and their customers, but the origin story of my chart is kind of fun.
- ▶ 1:03:44 David Rosenthal So it actually started as an outgrowth of what was called Epic Web in 1997, which was a project that they were working on for remote access to
- ▶ 1:04:32 David Rosenthal Sumit today is the president of Epic.
- ▶ 1:04:34 David Rosenthal And he goes to the then president of Epic, Carl Dvorak, and says, hey, you know, this is good that I'm working on this, but I'm kind of bored.
- ▶ 1:04:45 Ben Gilbert Which this says a lot about the culture of Epic.
- ▶ 1:05:24 Ben Gilbert For as many reasonable barbs get thrown at the company, some around, oh, old technology, and oh, the UI is kludgy, and all this stuff.
- ▶ 1:06:43 David Rosenthal Huge and starts this whole patient side virality now for the company.
- ▶ 1:07:51 David Rosenthal The company crosses fifty million in revenue.
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