The beginning of Pico Health
What was Pico Health?
Pico Health existed from September 2011 to December 2013. Back then, the ACA hadn’t taken off yet, but Massachusetts had its own laws surrounding that. It suddenly made everything challenging for small companies because when you had 11 full-time employees, you had to offer health insurance. You had to worry about getting a group plan and payroll deductions. It was a whole big mess that nobody wanted to deal with or understood.
My grand idea was that I was going to make a multi-employer welfare agreement (MEWA). I was going to take startups and pool them together to make them into a big group so that they could get the big group rates and buy in. That was the grand vision.
What was your academic and professional background prior to starting Pico Health?
I finished college in 2001 with a degree in biology and a minor in statistics. I gradually found my way to health care. I wanted to be an actuary to solve financial problems for insurance companies. But I started out in biology because that was my degree. I meandered to health insurance, and I ended up at athenahealth for four years working on the rules engine. It involved taking regulatory guidelines from insurance companies, government, and claim denials and codifying them so that our clients didn’t get that denial ever again. I was writing algorithms and working with developers to codify regulations.
What motivated you to start Pico Health?
I left athenahealth and briefly ran an herbal tea company, Poki Teas. I went to craft fairs and sold a couple things. Then I went back to work at Blue Cross for a little bit and decided to give entrepreneurship another shot. When I left Blue Cross, [I spoke to my housemate’s date who] was a serial entrepreneur. I [told him], “I don’t know what I’m going to do next,” and he said, “You work in health insurance! Every single startup I’ve ever known struggles with health insurance at some point. And if you know this, wouldn’t you be a great resource?” The very next day, I was out getting beers with some friends, and one of them had made his own startup. He explained, “I really want to hire this one guy, but he’s got chronic health conditions. I don’t understand this insurance thing.” He’s from the UK and completely had no idea, so [I offered to take a stab at it], and that kind of started it.
How did you source clients typically?
I went to a lot of meetups, conferences. I talked to everybody. The Venture Café was a great place to meet people. Mass Innovations Nights was a great place to meet people. McCarter & English was a law firm that focuses on startups and they had great events for meeting people. It was a lot of going around, networking, and shaping what I was trying to do.
What did you envision to be your next step for Pico Health?
At the end, I was applying to startup accelerators. I applied to MassChallenge and my idea was that I was going to use them as my first crop [of insurance enrollees]. I was going to go there, and for the first crop of startups I was in, I was going to get everyone health insurance. The intention was to go to accelerators and VC firms and tell them, “I want to take your stable of startups and put them into a nice package for you. It’ll make you attractive to your startups to participate.” However, a lot of it was personal legal research asking the right people the right questions.
Stepping back from Pico Health
What was your day-to-day like? What were you doing most days?
I did a lot of research and networking. I would spend an entire day trying to make my website better, or I would do a lot of blogging. I went out a lot; I made a point of going to co-working spaces. I knew another startup that wanted to use restaurants as office space during the day to help with the space shortage in Boston. I’d go work at his place sometimes. However, it began to arrest after about 8-10 months.
Why did the business slow down?
I really needed a co-founder. It was difficult to do the analytical work and get out there and practice being an extrovert. A lot of the advice I started to get was “Hey, you could make this beautiful out-of-the-box insurance agency,” but I didn’t want to do that.
One of Pico Health’s fatal flaws was that I was eating my own lunch. The people who really wanted my help were people who were having trouble meeting the individual mandate. They needed insurance because they lived in Massachusetts, and that was the law. Every person I helped with that was one less person who would buy into the large group plan. It kept trying to turn into an insurance agency. It kept pulling me in that direction.
Why did you eventually close the company?
I just ended it. I still sometimes give consulting services. I had a few people reach out. “Oh, my friend with a startup wants to hire this person. Can you help?” It really started to close down when the ACA expanded more because it’s amazing how quickly your technical information about this sort of thing starts to get old. None of the stuff I knew actually helps anymore.
By the end when you stepped away from Pico Health, how did you feel about it?
It was time. I had a recruiter contact me about a job at a company that I actually met somebody from at a conference in New York that I had done networking at. It was exciting; I felt way more prepared to be interviewed.
What other lessons did you learn from Pico Health, creating it, and running it?
I learned that most anything can be learned. I learned to schmooze. I never thought I’d be good at schmoozing. My first couple of meetups, I was terrified. I sat in a corner and stuck my head in my computer and hoped nobody would talk to me, but then I got over it.
I [also] loved taking classes. The Center for Women and Enterprise has this fantastic class that I took, and it was mostly for building household businesses. A few of us applied to MassChallenge with our different ideas, and that was fun. I took the “Nuts and Bolts of New Ventures” at MIT which is free every January, and I can’t recommend it enough. It’s so intensive. It taught you how to find a co-founder, legal things you need to worry about, how to divide up equity, and how to pitch.
Does a large part of your expertise in certain things drive you to say, “I can do it better, so let me?”
Yeah, that’s actually pretty fair. But it’s weird because one reason I’m in school now is because just because I can do it better doesn’t mean anyone believes me. So, I’m taking all these business classes so I can get better at communicating, pitching, and framing things so that people can better understand.
What kind of skills would you have liked from a co-founder if you had one?
I wanted someone who wanted to go out there and be in front, shake the hands, do the pitches, and sell it. I would’ve done the legal research and gotten licensed with more insurance companies to sell their product. I would’ve focused more on coming up with exactly what this needed to look like from a legal standpoint. And targeting venture capital firms or accelerators that would benefit from my expertise. I wanted to be the technical co-founder even though it wasn’t technology, it was still the technical aspect of what I was doing.
Do you think you’ll return to startups?
No, I think I’m done with startups. One of the things I got out of Pico Health was that I met a bunch of other startups, and for a while, I was the director of operations at a patient advocacy startup that was slightly further along than PH. They had been through an accelerator. They were in the middle of getting Series A together, so they were going to be funded. I did that, and it’s just exhausting. I want some place with structure. I want to know what’s going on. And I want to lead or manage a team and do intrapreneurship where you do mad, crazy things within an organization to come up with clever solutions.
I want to go to work in management because I’m interested in community building, sharing knowledge, diversity of opinions, and seeing if I can do it. I’m taking a class through the IHI right now about advocacy. It’s about how to advocate through organizing groups where you get your objectives met by finding people, developing them into leaders, and having them follow you on your vision. I think I need to learn more about how to work with large groups of people and how to steer them. My hope is to do that for a few years and then see where I am.