StarZero All shows Try the podcast clipper →

Jan 7, 2019 · 21m · top-founders

1262 200 Physicians Have Invested $6m Into This Company at $30m Valuation

Lawrence Girard · 11m spoken Nathan Latka · 7m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this episode of The Top Entrepreneurs Podcast, Nathan Latka interviews Fruit Street Health CEO Lawrence Girard to discuss how the digital health startup raised over $10 million from 250 physician investors. Girard details the company's strategic pivot from B2B SaaS to milestone-based health insurance reimbursement for diabetes prevention.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 38% of the talking time here. How this is scored →

Nathan as informed peer 4.5 Guest teaching 4.5 Guest disagreement 2.5 Nathan pushing back 4.2
05100:0010:0020:001:34–6:02 · Nathan as informed peer 5/10 Fruit Street Health and Diabetes Prevention Program Nathan presses on the operational friction of managing 200 physician investors on a cap table during an exit. Lawrence clarifies that a dual-class share structure preserves his sole voting control.6:02–8:33 · Nathan as informed peer 4/10 Strategic Pivot from SaaS to Insurance Reimbursement Lawrence explains the strategic necessity of pivoting from SaaS licensing to insurance reimbursement through Solera Health, outlining the specific milestone payout mechanics.8:33–11:19 · Nathan as informed peer 5/10 Commercial Growth Strategy and Clinical Outcome Validation Nathan questions how Fruit Street proves clinical attribution for patient weight loss. Lawrence outlines their CDC reporting standards and comparative trial validation plans.11:21–14:41 · Nathan as informed peer 4/10 Patient Engagement Criteria and Attribution Tracking Nathan asks if Fruit Street gets paid if a patient loses weight without using the app. Lawrence educates him on the CDC's strict qualifying criteria requiring two of six weekly engagement actions.14:42–18:37 · Nathan as informed peer 7/10 Valuation Multiples, Technological Moats, and Exit Strategy Nathan directly challenges Lawrence on valuation multiples, lack of moats, and the difficulty of exiting when funding vastly exceeds revenue. Lawrence counters by framing digital therapeutics like pharma and defending execution over software patents.18:37–20:08 · Nathan as informed peer 2/10 The Famous Five Rapid-Fire Questions The conversation concludes amicably with Nathan's standard Famous Five rapid-fire format.1:34–6:02 · Guest teaching 4/10 Fruit Street Health and Diabetes Prevention Program Nathan presses on the operational friction of managing 200 physician investors on a cap table during an exit. Lawrence clarifies that a dual-class share structure preserves his sole voting control.6:02–8:33 · Guest teaching 6/10 Strategic Pivot from SaaS to Insurance Reimbursement Lawrence explains the strategic necessity of pivoting from SaaS licensing to insurance reimbursement through Solera Health, outlining the specific milestone payout mechanics.8:33–11:19 · Guest teaching 5/10 Commercial Growth Strategy and Clinical Outcome Validation Nathan questions how Fruit Street proves clinical attribution for patient weight loss. Lawrence outlines their CDC reporting standards and comparative trial validation plans.11:21–14:41 · Guest teaching 7/10 Patient Engagement Criteria and Attribution Tracking Nathan asks if Fruit Street gets paid if a patient loses weight without using the app. Lawrence educates him on the CDC's strict qualifying criteria requiring two of six weekly engagement actions.14:42–18:37 · Guest teaching 5/10 Valuation Multiples, Technological Moats, and Exit Strategy Nathan directly challenges Lawrence on valuation multiples, lack of moats, and the difficulty of exiting when funding vastly exceeds revenue. Lawrence counters by framing digital therapeutics like pharma and defending execution over software patents.18:37–20:08 · Guest teaching 0/10 The Famous Five Rapid-Fire Questions The conversation concludes amicably with Nathan's standard Famous Five rapid-fire format.1:34–6:02 · Guest disagreement 3/10 Fruit Street Health and Diabetes Prevention Program Nathan presses on the operational friction of managing 200 physician investors on a cap table during an exit. Lawrence clarifies that a dual-class share structure preserves his sole voting control.6:02–8:33 · Guest disagreement 2/10 Strategic Pivot from SaaS to Insurance Reimbursement Lawrence explains the strategic necessity of pivoting from SaaS licensing to insurance reimbursement through Solera Health, outlining the specific milestone payout mechanics.8:33–11:19 · Guest disagreement 2/10 Commercial Growth Strategy and Clinical Outcome Validation Nathan questions how Fruit Street proves clinical attribution for patient weight loss. Lawrence outlines their CDC reporting standards and comparative trial validation plans.11:21–14:41 · Guest disagreement 2/10 Patient Engagement Criteria and Attribution Tracking Nathan asks if Fruit Street gets paid if a patient loses weight without using the app. Lawrence educates him on the CDC's strict qualifying criteria requiring two of six weekly engagement actions.14:42–18:37 · Guest disagreement 6/10 Valuation Multiples, Technological Moats, and Exit Strategy Nathan directly challenges Lawrence on valuation multiples, lack of moats, and the difficulty of exiting when funding vastly exceeds revenue. Lawrence counters by framing digital therapeutics like pharma and defending execution over software patents.18:37–20:08 · Guest disagreement 0/10 The Famous Five Rapid-Fire Questions The conversation concludes amicably with Nathan's standard Famous Five rapid-fire format.1:34–6:02 · Nathan pushing back 5/10 Fruit Street Health and Diabetes Prevention Program Nathan presses on the operational friction of managing 200 physician investors on a cap table during an exit. Lawrence clarifies that a dual-class share structure preserves his sole voting control.6:02–8:33 · Nathan pushing back 3/10 Strategic Pivot from SaaS to Insurance Reimbursement Lawrence explains the strategic necessity of pivoting from SaaS licensing to insurance reimbursement through Solera Health, outlining the specific milestone payout mechanics.8:33–11:19 · Nathan pushing back 5/10 Commercial Growth Strategy and Clinical Outcome Validation Nathan questions how Fruit Street proves clinical attribution for patient weight loss. Lawrence outlines their CDC reporting standards and comparative trial validation plans.11:21–14:41 · Nathan pushing back 4/10 Patient Engagement Criteria and Attribution Tracking Nathan asks if Fruit Street gets paid if a patient loses weight without using the app. Lawrence educates him on the CDC's strict qualifying criteria requiring two of six weekly engagement actions.14:42–18:37 · Nathan pushing back 8/10 Valuation Multiples, Technological Moats, and Exit Strategy Nathan directly challenges Lawrence on valuation multiples, lack of moats, and the difficulty of exiting when funding vastly exceeds revenue. Lawrence counters by framing digital therapeutics like pharma and defending execution over software patents.18:37–20:08 · Nathan pushing back 0/10 The Famous Five Rapid-Fire Questions The conversation concludes amicably with Nathan's standard Famous Five rapid-fire format.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 63.5% · guest 36.5%0:00 · Nathan 63.5% · guest 36.5%3:00 · Nathan 26.1% · guest 73.9%3:00 · Nathan 26.1% · guest 73.9%6:00 · Nathan 19% · guest 81%6:00 · Nathan 19% · guest 81%9:00 · Nathan 49.9% · guest 50.1%9:00 · Nathan 49.9% · guest 50.1%12:00 · Nathan 23.9% · guest 76.1%12:00 · Nathan 23.9% · guest 76.1%15:00 · Nathan 36.7% · guest 63.3%15:00 · Nathan 36.7% · guest 63.3%18:00 · Nathan 46.2% · guest 53.8%18:00 · Nathan 46.2% · guest 53.8%21:00 · Nathan 0% · guest 0%21:00 · Nathan 0% · guest 0%
Sharpest disagreement ▶ 15:58 Lawrence rejects SaaS multiple framing for pharma digital therapeutics analogy

Lawrence explicitly rejects Nathan's financial multiple argument, arguing digital health software should be valued more like pre-revenue pharmaceutical therapeutics.

 Hardest push from Nathan ▶ 15:40 Nathan refutes Lawrence's exit difficulty comparison

Nathan cuts in to counter Lawrence's logic, demonstrating that raising $10M on sub-$1M revenue creates a much steeper hurdle than competitor Omada's capital structure.

 Biggest teaching moment ▶ 11:46 Lawrence educates Nathan on CDC engagement milestone requirements

Lawrence thoroughly corrects Nathan's assumption that passive weight loss earns payouts, listing the exact engagement metrics demanded by payers.

 Nathan holds their own ▶ 16:42 Nathan drills down on build-vs-buy replication threat

Nathan leverages M&A dynamics to point out that acquirers would rather spend $1M-$2M rebuilding standard video and app tech in-house than pay a premium on a $10M invested base.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Fruit Street Health and Diabetes Prevention Program 5435 Nathan presses on the operational friction of managing 200 physician investors on a cap table during an exit. Lawrence clarifies that a dual-class share structure preserves his sole voting control.
Strategic Pivot from SaaS to Insurance Reimbursement 4623 Lawrence explains the strategic necessity of pivoting from SaaS licensing to insurance reimbursement through Solera Health, outlining the specific milestone payout mechanics.
Commercial Growth Strategy and Clinical Outcome Validation 5525 Nathan questions how Fruit Street proves clinical attribution for patient weight loss. Lawrence outlines their CDC reporting standards and comparative trial validation plans.
Patient Engagement Criteria and Attribution Tracking 4724 Nathan asks if Fruit Street gets paid if a patient loses weight without using the app. Lawrence educates him on the CDC's strict qualifying criteria requiring two of six weekly engagement actions.
Valuation Multiples, Technological Moats, and Exit Strategy 7568 Nathan directly challenges Lawrence on valuation multiples, lack of moats, and the difficulty of exiting when funding vastly exceeds revenue. Lawrence counters by framing digital therapeutics like pharma and defending execution over software patents.
The Famous Five Rapid-Fire Questions 2000 The conversation concludes amicably with Nathan's standard Famous Five rapid-fire format.

Statements from this episode (11)

Assertion Partly supported
Girard: CMS Trial Found Lifestyle Program Outperformed Metformin
“It's based on clinical research the YMCA conducted with a big CMS innovation grant where they enrolled 3000 patients into a clinical trial, and they wanted to figure out if a drug called metformin was more effective than just making diet and lifestyle improvem…”
Lawrence Girard Jan 7, 2019 ▶ 2:11
Disclosure
Girard: Solera Health Submits Medical Claims on Fruit Street's Behalf
“And so we're reimbursed through medical claims, through our partnership with a company called Solera Health that submits claims to commercial health plans on our behalf for delivering the diabetes prevention program.”
Lawrence Girard Jan 7, 2019 ▶ 2:44
Assertion Supported
Girard: Fruit Street Raised Over $10M From 250 Physicians
“So now we have about 250 physicians that invested a little bit over ten million dollars of funding.”
Lawrence Girard Jan 7, 2019 ▶ 3:10
Assertion Not checkable as stated
Girard: Fruit Street Raises $200K Monthly From Doctors via LinkedIn
“And so if you looked at a 48 month graph of the company, which is how old we are we've raised a little bit over 200,000 dollars per month from physicians just through crowdfunding and LinkedIn advertising.”
Lawrence Girard Jan 7, 2019 ▶ 3:45
Assertion Supported
Girard: Dual-Class Structure Preserves Voting Control Amidst Hundreds of Investors
“So we have a dual class stock structure where I still have full voting control of the company.”
Lawrence Girard Jan 7, 2019 ▶ 5:47
Disclosure
Girard: Fruit Street Pivoted From a $200 Per Month SaaS Model
“It was a SaaS platform in the beginning, last time we spoke. Where we were licensing it for 200 dollars a month, and doctors and dieticians could use it with their patients.”
Lawrence Girard Jan 7, 2019 ▶ 7:16
Disclosure
Girard: Fruit Street Earns $345.60 Per Patient via Milestone Installments
“Then we're reimbursed, 345 dollars and 60 cents per patient for the program, where we get one payment when the patient signs up, at which point they get a free wireless scale, another payment at week four, at which point they get a Fitbit at no cost, Another p…”
Lawrence Girard Jan 7, 2019 ▶ 7:56
Insight
Girard: Healthcare Businesses Have Nothing Without Insurance Reimbursement
“So in healthcare, if you don't have reimbursement, you basically have nothing.”
Lawrence Girard Jan 7, 2019 ▶ 8:25
Assertion Not checkable as stated
Girard: Fruit Street Participants Average 4.2% Weight Loss at 16 Weeks
“Yeah, so we have about 225 signed up so far, and we have average weight loss right now, 3.1% at nine weeks, and 4.2% at 16 weeks, and a few people lost 11 or 12% of their weight already”
Lawrence Girard Jan 7, 2019 ▶ 9:17
Assertion Partly supported
Girard: Competitor Omada Health Raised $120M But Remains Unprofitable
“For example, the market leader in the space is Omada Health. They raised one hundred twenty million dollars and publicly stated that they're still not profitable.”
Lawrence Girard Jan 7, 2019 ▶ 15:18
Disclosure
Girard: Fruit Street Needs 150K Patients to Reach $50M Revenue
“I think our investors look at this as a five or 10 year project, right? So, I mean, eventually we want to grow this to, let's say you have 150,000 patients at 345 dollars a year going through the program. You have fifty million dollars in revenue, right?”
Lawrence Girard Jan 7, 2019 ▶ 17:47
Made with StarZero

Turn any episode into a week of clips.

This entire site, over 2,600 episodes transcribed, diarized, checked and made playable, runs on the StarZero media pipeline. Drop in your own episode and the podcast clipper finds the moments worth sharing, cuts them, captions them, and reframes them for every feed.

Try the podcast clipper Learn more