41 – Fed Holds Rates While Job Market Slows | Innovation Outlook | Biden Strives for More Healthcare Competition | Cigna exits MA

Vic: [00:00:00] The 41 what’s up? Good to be here. I’m excited. Uh, To get this in

Marcus: 41 day early. Me too. Uh, had a good time in Scottsdale, Arizona, beautiful weather, hanging out with the HFMA gang, some good conversations. Uh, it’s always fun having conversations with CFOs of, uh, big systems. Um, super smart people tracking everything.

Marcus: It makes me feel good about the work we do here on health further, because I can actually like sit at a table and. Hold my own, uh, conversations. Yeah, you’re

Vic: up on, you’re up on everything. Yeah. Yeah. I mean, I

Marcus: mean, look, these people are running the p and l and the balance sheet for multi-billion dollar health systems.

Marcus: Yeah. So, you know, to be able to have conversations with them and also like learn some really, really cool things. Mm-Hmm. . Um, actually I have something we need to look into. Um, there’s some state Medicaid tax. I’m gonna. I’m going to get more details on it, but, uh, I learned some interesting things that we need to look into particular States or, uh, it might be in particular States.

Marcus: So something we need to, something we need to look into. Um, but there’s, there’s definitely an arrangement that is happening between [00:01:00] CMS, state Medicaid agencies and hospitals. That is. Something worth understanding better. Let’s just put it that way. Um, so that was really good. Uh, interesting week in the, in the news, you know, ending up the, the month, I feel like a lot of the stories have continued to be.

Marcus: Tech really, really, really strong healthcare sort of in the rearview mirror looking back at last year overall pretty strong year There’s a dip sort of in between q3 and q4 But it rallied back by the end of the quarter really really strong across all the subsectors. I would say, you know the provider subsector Um, also the the pharma subsector obviously, you know, yeah a really strong year

Vic: Yeah, I think the payers are still trying to figure out medicare advantage, right?

Vic: Um, but we’ll, we’ll talk about health systems seem like they’re, they’re coming on HCA announced this week.

Marcus: So for sure, for sure. Are you ready to dig him? All[00:02:00]

Marcus: right. So starting off, we’re going to talk about the fed, uh, FOMC got together. And, um, obviously we, we talked about this for two weeks in a row. Now the CPI good, but not great. Yeah. Q4. Uh, economy results really, really good, but generally speaking, inflation, not where they want it and also not coming down fast enough.

Marcus: And so unlikely, we’re going to see a rate cut. And that was what Jerome Powell

Vic: communicated. That’s what he said. And he was very clear that in which should not expect anything in March either. Yeah. And so I think it seems like the Fed feels pretty confident in the strength of the economy, even with rates high.

Vic: And it’s hard to argue that we’ll talk through the jobs number and but GDP seems pretty good. Jobs is cooling a little bit, but good. And so they have almost the luxury of keeping rates pretty high, right? And focusing on inflation because it hasn’t, [00:03:00] I haven’t seen lots of broad job loss. It hasn’t been like a huge recessionary, everyone losing their jobs.

Vic: And so no, they’re watching that they might have to cut rates eventually. But as of now, it’s sort of steady as she goes, I think.

Marcus: Yeah. I mean, I think we’re going to talk a little bit about jobs in a second here, but I think in our industry. We have been hypersensitive to the fed because it’s so impactful to the capital markets that we live in and that we deal with.

Marcus: But the truth is, especially when you look back at the chart, now that 2023 has come and gone, and we’re in 2024, and we can look fully at 2020, 2021, 2022, and 2023, it’s absolutely obvious that we have returned to what the normal trajectory of 2021, 2022, and 2023. The capital markets would have been if we didn’t have the ridiculousness, that was the response to the pandemic and the monetary policy and the stimulus [00:04:00] and the STEMI checks and the, you know, game stops and all that kind of stuff.

Marcus: Like if we hadn’t had that where we are now in terms of. Look, five days in a row of all time highs with the stock market, right? Uh, when you look at the valuations, everything is pretty much just leveled out, it hasn’t cratered to where, to like pre pandemic levels, it hasn’t, it’s, it’s up from there for sure.

Marcus: So I think. We’re sensitive to it because it’s been pretty crushing to many parts of our industry. I would say for where you and I are being, you know, precede seed really hasn’t been that crushing all the, all the numbers we’re going to look through later, say we’re actually doing okay. But that, that growth venture segment, uh, really has taken an absolute beating and quite frankly, right.

Marcus: I mean, maybe it should have run

Vic: up was just too

Marcus: much.

Vic: Yeah. Yeah. I think for most of our listeners, everyone in healthcare. Especially the health systems and the providers and everything related to delivering care. It is very [00:05:00] sensitive to inflation.

Marcus: Yeah.

Vic: Right, because the, the revenue is essentially fixed, uh, through CMS and insurance.

Vic: And the costs, largely people, but other costs, Are sensitive to inflation, and so I think it’s really important for our industry that we get inflation under control, and it’s pretty clear the way they calculate shelter and things. It’s declining, but pretty slowly, and I think it’s probably healthy that the Fed holds on and tries to really make sure inflation is is.

Vic: Kind of under three maybe even at two. The thing is if you’re going to hit a two percent long term Eventually, it has to go below two sometimes. I mean, you need to sort of go around two So just getting to 2. 9 or wherever we were last month You’re not quite far enough and right although, you know for exit portfolios or or stock values It’d be nice to have [00:06:00] You know, to the moon back again, it’s not healthy, probably for the economy, and it really is damaging for health systems and providers and almost The entire healthcare complex is, is pretty dependent on keeping inflation low.

Marcus: Yeah. And I think we also do need to get the rates low because we need capital markets as well as just lending and the bond markets as well to all sort of get back moving. And I don’t mean like treasuries. I mean, you know, like things like healthcare bonds, right? I mean, you know, we, we need all these things to be able to move and, uh, support the underlying mechanics of the industry.

Marcus: So it’s, it’s good. You know, I, I think. The worst case scenario this year that I can see barring any black swan event is a flat year rates wise. And I think the truth is, while everyone would hate that we could stomach it, you know, we could deal with that. We can’t deal with a rate hike, but we could deal with a flat year if we had to.

Vic: Yeah, I mean, I like, um, consistency, so the Fed being [00:07:00] kind of slow and thoughtful and talking about March. We’re not gonna do anything. We’re looking at sort of mid year. That’s what I want the Fed to do. I don’t want them swinging around wildly and cutting and then having to raise again this summer. I’d rather them be kind of steady as she goes.

Marcus: Uh, is it fair to say that. The fed was right. And we were wrong in our assessment of the job that they did last year. Now, now that we’re, we’re on the other side of it. I mean, it was painful while they were doing it. We didn’t like it at all. It was scary. Uh, but now that we’re on the other side of it, how do, how are you feeling about the job that they did overall?

Marcus: Like not just how it impacted our industry, but just overall based on where inflation is based on where the market is based on where the economy is from a performance perspective.

Vic: Yeah. I mean, I think that in my opinion, the Fed has never executed a soft landing without going too far and, and causing [00:08:00] problems, but this is probably what it looks like.

Vic: So, so we’ll see, I don’t think we’re finished yet, but this, it, it looks like they’re doing a pretty good job. And, and, um, VCs like me probably will always complain when the Fed raises rates. Um, But there hasn’t been massive, huge numbers of layoffs or business failures, or really a lot of economic challenges and inflation is, is largely coming down.

Vic: So yes.

Marcus: All right, let’s move on to job openings. So, uh, the, the job openings report, they call it jolts, uh, came out and, um, basically There was a rise in job openings, but resignations are decreasing, and I think there’s definitely a sense that the whole quiet quitting just just the craziness and the unevenness that was happening through the pandemic is is now far over.

Marcus: I did find it interesting that job openings are, are rising. I [00:09:00] thought that was, that was interesting. Cause it seems like at least from the perspective of our industry, things have largely been on the decline. There’s been a lot of layoffs in, in the tech sector, as well as in the media sector, um, not so much in the healthcare space, um, but just, just sort of interesting that job openings rose.

Vic: Yeah. I think that, um, The economy is still trying to find workers. I agree. Not as many like full remote work and come in whenever you feel like it. And we won’t really check in anything. It’s much more of normal, kind of normal. I noticed UPS went to Uh, five days in the office now. Oh, wow. Um, that was the first big company that I saw that, you know, it’s just getting rid of remote work altogether.

Marcus: Yeah.

Vic: Um, but then the originations is decreasing. And what that means I think is that people aren’t as confident that they can quit their job and they’ll find something else at higher pay. Uh, very easily and so it’s a kind of a mixed signal, [00:10:00] um, and I think what the feds looking for. It’s not terrible. Um, the jobs were okay, but they’re declining.

Vic: They’re sort of cooling slightly is how it so you can see from the chart. Maybe we go to the chart. So the the dark line is the hiring rate. They don’t really get hired. And then the light gray is, is the openings then in between that, that sort of a light bluish 1 is so people that are listening all 3 have been declining since sort of the post pandemic.

Vic: You know, huge higher.

Marcus: Yeah. So quits, quits, rate openings, rate and hiring rate are the three different lines that this, this, uh, chart and they’re all trending

Vic: down fairly shallow trajectory. They’re not falling off a cliff, but they’re trending down. They’re down. They’re visibly

Marcus: down. Yeah. Uh, I think the, the, the quits rate and the openings rate both feel a little bit steeper than the decrease of the hiring rate.

Marcus: Uh, but overall, I mean, it’s a, it’s a decline. So, [00:11:00] um, I mean, that feels like, Yeah. What the job market feels like out here to me right now. Um, less, less leverage for workers, but that still depends on where you’re working. I think nurses still have a lot of leverage. So, yeah. All right. So, and then Vic wasn’t aware of this.

Marcus: So, you know, I wanted to just kind of focus in on what’s going on in tech because we can talk a lot about health care, but as investors, we’re largely investing in technology businesses. At least Vic and I would do. Software businesses. And so there’s this website called layoffs, layoffs dot FYI. Um, that’s been tracking tech layoffs since the pandemic started and kind of tracks them every year now.

Marcus: And so in 2024, we’re only one month in 107 tech companies in America. Have had layoffs and they’ve laid off 29, 475 employees. And we’ve been hearing about these layoffs happening on a pretty regular basis. Uh, but some pretty big [00:12:00] names here, uh, PayPal laid off 2, 500 block laid off 1, 000. Uh, I robot, you talked about that failed merger with Amazon because of the regulators.

Marcus: They, they laid off, uh, 352 days ago.

Vic: Right.

Marcus: Um, let’s see what else here. Salesforce, 700, Microsoft did 1, 900 and.

Vic: Microsoft just had a huge, like. Blow out earnings and they’re laying off people. I think that’s sort of a trend I’m seeing. Yeah,

Marcus: these are, these are not companies that are not profitable. These are companies, well, some of them may be having some PNL issues, but you know, your Microsoft’s and your Google’s when, when they’re doing these layoffs, they’re, they’re saying they’re doing it for efficiency purposes and to, to drive their AI initiatives, right?

Marcus: Yeah. So

Vic: like reallocating resources, maybe staffing up somewhere else and cutting. Um, one of them cut it, cut a division that wasn’t, wasn’t. Useful anymore. I forget. Maybe it might have been Google. I can’t remember.

Marcus: Yeah. And, and this, I mean, this, this, uh, pet project is now, uh, sponsored and [00:13:00] regularly sourced by big media brands like, like Bloomberg, uh, New York times.

Marcus: We’re going to next go to a JP Morgan report and JP Morgan’s report actually references this, uh, this website. So

Vic: it’s a good resource. I didn’t really, it’s great to know. I think it’s part of the reason I wanted to show it as I didn’t, I wasn’t aware of it yesterday. And it’s a good resource to know about.

Marcus: Yep. Absolutely. All right. Uh, so JP Morgan, uh, just published a report called the innovation economy outlook. I’d never seen this report before. Um, I’m used to reports from CBN sites. Obviously pitch book does a great job on a regular basis. Carta got into the game last year with their state of the markets.

Marcus: Uh, but it was great to see JP Morgan coming into the, the, the game and doing sort of a wrap up on last year and a look forward for our industry and where things are going. For everyone who doesn’t understand sort of the significance of this, JP Morgan, obviously the largest bank in America. Um, and for them, I mean, what would be bin market for them is for most people like enterprise.

Marcus: I mean, like, like they’re [00:14:00] so big that, uh, I think even covering the venture space is, is great. It’s great. It’s really, really great. So anyway, um, as we looked through it, what we found was that they, they sourced really sort of three or four different, um, uh, prime sources. I would say the principal prime source is, is PitchBook.

Marcus: So they use the PitchBook Venture Monitor, which we use a lot. I just used it for my LP update that I’m sending out. Um, so it’s a, it’s a great resource to kind of know, and you can get it for free online. So definitely if you’re a listener and you’re interested,

Vic: yeah, if

Marcus: you want to know sort of what’s going on in the private market, how different stages are performing, how capital aggregation is happening, deal volume, deal value.

Marcus: Uh, pitch book, venture monitor. It’s also, I think, co co produced with the NVCA. Um, it’s great. It comes out quarterly and then they do an annual sort of look back at the whole year. So that’s one of the, uh, principal sources. And then they also, uh, merged in, uh, JP Morgan’s own business leaders outlook, [00:15:00] which is basically a report, a survey, I think, where they talked to a bunch of different mid.

Marcus: Mid market, um, CEOs and gather sentiment about how they’re, how people are feeling about the market, about the economy. So they, they really blended those two things along with some, uh, some numbers from the Bureau of Labor Statistics, as well as, uh, I think I talked about, uh, layoffs dot F F Y I. So those are kind of the main sources, but Vic, do you want to kind of go through a couple of these slides?

Marcus: I think it’s first one. I think it’s nice.

Vic: I mean, I like this first chart. So for people that are listening, it’s sort of. Public market valuations compared with venture investing and they also pull out, um, what they call big tech, which is basically the, the seven big tech companies. I think it actually list them.

Vic: They’re apple, Microsoft, Amazon, Alphabet, meta. And what I thought was really interesting is when we can talk about the recent stuff in a minute, but. Back to 2010, 2010 to 2015, tech was, was neck and neck right with the rest of the market, and it really didn’t start breaking [00:16:00] out until 2016, 2017 or so. Um, and then of course recently it’s, it’s been, uh, really different, really grown much more quickly.

Vic: And so, um, I guess I just get so used to tech. Texting like, um, growing so quickly versus the rest of the world, but it was good reminder that that hadn’t always been the case. Not that long ago. No, no, when

Marcus: you see it in a time series, you realize 10 years ago, big tech and the rest of the market were multiple.

Marcus: Same, same thing, right? And today, I mean, big tech is. Relative to the rest of the S and P for X, the size. Yeah. I mean, that’s, that’s insane. And I think the other thing that this chart does a good job of showing is that venture investment was tracking big tech very, very closely, uh, until post pandemic really until the rates, uh, went up and then venture investment jumped.

Marcus: Off a cliff where big tech [00:17:00] resurged, uh, coming out of 2022 and now has really pulled away from us venture investment. And so that’s, that’s actually a pretty scary proposition for pure tech VCs, I think, um, because the L you think about the leverage in that dynamic now, Is getting really, really bad, especially as we move into this AI world where you need hardware, you need cloud computing, you need infrastructure, you know, all the big tech companies that are up here, Apple, Microsoft, Amazon, Alphabet, Meta, they’ve got that in spades.

Marcus: They all have that kind of infrastructure. Um, small tech companies, VC backed companies, they, they are dependent on big tech for those things. So I think there’s actually a really big issue for. Uh, mainstream venture tech technology, venture capital here, where they’re going to have to figure out how they’re going to differentiate or rally back.

Marcus: How, how are they going to get distribution? How are they going to compete on pure technology features, capabilities, um, [00:18:00] robustness of, of capabilities, speed of deployment. How are they going to compete with that kind of, uh, spread and, and difference in, in, in size?

Vic: Yeah. So let’s just talk about that. I think the.

Vic: The spread is an AI halo effect or actual effect because those companies, apple, Microsoft, Amazon, alphabet, meta, they all, they’re at all time highs. They all are all time highs, and they all are leveraging and benefiting from ai, both in their operations and in their PE in like all the excitement and Halo, what I’m calling Halo effect.

Marcus: Yeah, and, and also the thing is they’ve moved away from small acquisitions. They’re doing big acquisitions now, right? I mean, their acquisitions now are like acquisitions of, you know, big giant eats a little giant. So, and I think Microsoft is the perfect example of that. You know, when you look at the kind of acquisitions they’ve done, uh, LinkedIn, right.

Marcus: Um, you know, the open [00:19:00] AI investment, it’s, these are not small. Acquisitions they’re doing and they’ve assembled this, this array of assets that are all sort of now integrated them that created the 3 trillion monster, right? I mean, it’s, it’s, they’re just pulling away, not just through technical, technological capabilities and product distribution, but M and a, M and a is now sort of a strategic tool they use to pull away.

Marcus: Yeah. And the market’s rewarding them every time they do these acquisitions, the market says you’re more valuable. So they get more capital to do more acquisitions. I mean,

Vic: yeah, I, I sort of, um, I’m hopeful maybe, but I don’t have evidence for it that the open source community is going to empower startups to compete.

Vic: We’ll see, but the llama platform is, is pretty good. Um, but yes, I mean, that, that’s the question. Maybe they’ll just run away with it.

Marcus: Okay. Let me tell you my view on this because I used to be a programmer and I had my most successful run as a programmer [00:20:00] in. Open source technology, PHP, right? That was like what I, what I lived, breathed, built Emma on and it went great.

Marcus: I’ve seen open source be very, very successful to this day, quite frankly. Like if you look at the web servers that are running all over the world,

Vic: yeah, Apache is probably the number one web server.

Marcus: Yeah. Yeah. Or, or express or whatever. I mean, like it doesn’t matter. Some underlying open source software is powering the guts of the internet.

Marcus: Right. No question. Okay. The problem, the problem is big tech has figured that out. Big tech has figured out how to support, contribute, leverage all of that. Right. I mean, especially if you look at Google cloud and you look at, you know, how they leverage Apache technology inside of GCP, Google cloud platform, for example.

Marcus: I mean, there are many meaningful. Aspects of Google Cloud [00:21:00] Platform that are just Apache projects at the end of the day. Yeah,

Vic: same with Meta. I mean, they, they have a bunch of internal infrastructure tools. Right. They open source to get their own cost down.

Marcus: Exactly, exactly. So they are very, very good at leveraging open source.

Marcus: And in fact, this is probably one of the big turnarounds for Microsoft, right? When they figured out. Yeah. Stop hating open source embrace open source and that really fixed their developer problem. Okay, so

Vic: many bought github, didn’t they?

Marcus: Yeah

Vic: the main open source Platform, that’s exactly

Marcus: right. So so big tech is really really good at open source now Okay, what I’ve never seen open source ever be any good at is beating big tech at the consumer level Never.

Marcus: I’ve never seen it work. You know, I used to try to have Linux laptops, you know, Ubuntu and Sousa. It’s too hard. It’s too hard. It’s too hard. They, they, they cannot compete on experience. They cannot [00:22:00] compete on robustness. They cannot compete on hardware integrations, open source. It’s like, uh, it, it truly is too liberal to be able to compete all the way through to the consumer market.

Marcus: And, and I would consider even like enterprise software, the consumer market at the end of the day, you know, I think the, the, the best thing we’ve ever seen, uh, in terms of open source software at the enterprise is probably red hat. And probably second to that is Novell. Remember, Android, maybe Android.

Marcus: It’s Google. That’s Google. That’s Google. Let’s be, no, no, no. Okay, but they, that’s Google. What other company has produced Android more than Google? Well, not more, but Samsung uses Android. Okay, that’s Samsung. That’s another big tech company. I’m talking about where, like, the whole company is based on commercializing open source, dedicated to it.

Marcus: Yeah,

Vic: that doesn’t, that [00:23:00] doesn’t work. Red Hat is probably the best one. Red Hat is the biggest one. Right,

Marcus: that’s what I’m saying. Red Hat was the biggest one. And remember, uh, uh, I think Eric Schmidt, before being at Google, I think he came from Novell. And Novell is a Linux company. I didn’t know that. Yeah.

Marcus: Novell was predated Linux, didn’t they? Novell is a Linux company, so that’s, that’s my problem. My problem is I’ve never seen a true open source anything ever be able to compete in commercialization. Absolutely. When it comes to core internet based technology, it’s incredible. And that, that’s great for us because it empowers teams to leverage free software to build their stuff.

Marcus: So that’s great for us. Less capital. Intensive for us that plus the cloud that big tech creates is great for VCs. But when you really talk about competing with big tech, I don’t, uh, it’s, it’s not really a, It doesn’t level any playing field because Big Tech [00:24:00] uses it much, much better than you do internally.

Marcus: So anyway, that’s why I think Big Tech is running away with it.

Vic: Well, you said it’s going to be difficult for pure software VCs. Yes. I mean, we do healthcare related things, which is very complex and regulated and Different, not very different, but a little different.

Marcus: I mean, I mean, so far that’s the saving grace for us.

Marcus: Yeah, right.

Vic: That’s why we’re still sitting here because it’s, it’s messy and there’s human life at stake and the regulators have a lot of power and that’s a hassle, but it also creates a space where we spend enough time to understand that to launch things. But so you think that pure software VCs. Are going to be challenged to, to compete.

Marcus: I think, well, okay, let’s, let’s get a little bit more nuanced

Vic: here.

Marcus: Okay. Because actually this goes to another point in this deck, so I’m going to skip ahead. No, I don’t want to talk about that. I don’t want to [00:25:00] talk about that. I want to talk about the different stages because that’s the.

Vic: Yeah, here, here.

Vic: Yeah.

Marcus: Okay. So this is a slide nine on this deck. We’ll, we’ll link to the deck for everybody. Um, the, the headline is mixed impact as valuation trends diverge. So I spent a fair amount of time in my LP update talking about this. So I’m thinking about it a lot and I feel like 2023. The work that Catherine and I did at NUVA is really characterized by this slide.

Vic: Yeah, and we are, you are, and I am divining strategy for our fund where we make money based on how we think this slide is going to evolve in the next few years.

Marcus: Correct. Yes. Okay. So, When we look at that decrease in venture investment, what we really are seeing is a decrease in growth venture because that’s where the a UM aggregates that where the at the biggest click big checks are.

Marcus: That’s right. Right. You know, hundreds of millions of dollars. Right. Billion dollar VC deals.

Vic: Yeah. All that kind of stuff. Tiger Global putting $500 million in a late stage General [00:26:00] catalyst. I mean, you know, even

Marcus: folks who were still in the game, you know, soft banks and Tiger. Yes. But even folks who are still in the game, the growth people, we, you and I are not growth.

Marcus: Right. VCs, right? We’re seed stage VCs. So for those who are listening, this, this, uh, this slide has a graph on it that basically lays out seed stage valuations as an index versus series a and later series a, b, c, d plus

Vic: basically over two years. How did the valuations evolve?

Marcus: Right. Um, and seed has pulled away.

Marcus: Seed is higher. Seed valuations now are higher than they were in Q1 of 2022.

Vic: Everyone else is down.

Marcus: Yeah. Everyone else is down. Okay. And they’re, they’re kind of correcting and they’re, they’re adjusting, et cetera. But like, what we know is that they’re down year over year, anywhere from 35 percent to 60%, depending on the stage that you’re in.

Marcus: Okay. And. What that means is [00:27:00] those later stages, you can’t write 40, 50, a hundred million dollar checks without an expectation of a mega M& A event or going public. Like those are your only options. You can’t do, you can’t write the check without having that kind of, uh, end goal in mind for us writing one to even 5 million checks.

Marcus: It’s a completely different game. We can go after niches, right? We can go after niches. We can, uh, syndicate with other smart, early stage VCs. We can build good companies that perform. And if they exit for a hundred, 150, 200 million, that’s the goal. That’s fine. That’s, that’s fine. And as we’ve discussed, I mean, those numbers, those are numbers that not just big tech, Uh, you know, any fortune 50 company, a VP of Corp dev can write that kind of check without much [00:28:00] approval.

Marcus: So it’s a very different game. Now, I would say what has changed most for seed stage VCs and seed stage companies is we can no longer be growth at all costs oriented because our, our, our graduation to series a has been impaired. And I think we should plan on it being impaired for. The mid to long term, I think it’s not going to come back the way it was.

Marcus: We’re not going to have series a investors coming in, swooping in, saving our companies, giving them a filter down

Vic: from the

Marcus: growth. That’s that’s exactly right. So, so I, I think what’s really, really different is not for all, but for many seed stage companies. They need to be profitable. Like they need to be functional growth companies.

Marcus: I wouldn’t even call them high growth companies, you know, not in terms of like what we used to call high growth through most of the, you know, 2010s. Right. I think they need to be healthy growing companies with at least the [00:29:00] ability to get profitable. And have favorable capital relationships that will help them position to a really nice revenue clip at a reasonable multiple, not 10 X more like five X.

Marcus: Okay. I mean, that’s probably, that’s I think healthy. Yeah. That’s where it’s going, you know, get to 15, 20 million in revenue. Seed

Vic: stage should be. Figure out the business model, make it, make sure it’s repeatable. Prove you can repeat it and you’re viable. Yeah. That’s how you may decide you want to grab more market share by investing more in growth than, than you bring in every month.

Vic: But that’s a conscious decision that you’re making. And if you ever decide we need to change, you, you know, the levers to pull, right? That that’s what it used to be getting through seed meant. And it turned over the last five to eight years, it turned into this, like, grow at all costs momentum thing that I think was not healthy.

Marcus: Yeah. And also, we need to acknowledge that seed. [00:30:00] Investing is very different from growth venture investing. It’s super different. It’s a different skill set entirely so I don’t think the growth folks can just come down to seed and Compete. No, they were so can I mean

Vic: they can they can try but it’s not the job that they’re used to It wouldn’t be fun for them,

Marcus: right?

Marcus: I think that’s the reality is it wouldn’t be fun for them a they don’t want to write small checks B It’s a lot of work. This is a lot of work now The one thing I will sort of call out That is continued to sort of be caught in the middle of all of this right sizing of the industry and capital markets is biotech because biotech is different productivity and biotech is not based on PNL performance.

Marcus: It’s based on science advancing and that. Kind of worries me a little bit, um, that we’re not, you know, when we talk about big tech, I think we can say the same for big pharma, right? Big pharma kind of was running away with it. And are [00:31:00] we going to lose the ability because of the capital market compression to have new entrants come into the space that will take a risk and take a shot on an asset that maybe big pharma just will not for whatever profile is the

Vic: real scary thing about.

Vic: Biotech is the NIH cutting back. I mean, they’re not funding as many research projects, and the ones they do are smaller in size, and that’s sort of all of the early invention that then biotech builds on. Right. And if that dries up, it’s not clear. I mean, the business model doesn’t work if NIH isn’t, isn’t Also supporting the research.

Vic: I think that’s right. I think that’s right. So, uh, so anyway, it’s in summary like if someone is not us because we’re interested in health care, but a Software focused vc in san francisco right now if they’re in seed or precede. I think they’re fine they’re fine, they will find niches and tools [00:32:00] that then

Marcus: That, that, that big tech will never care about

Vic: like, you know, Yeah.

Vic: Yeah. Let’s just say it

Marcus: this way. There are lots of inefficiencies. In industries all over the world, not just the country all over the world, uh, where you can create hundreds of millions of dollars of value. The, the, those opportunities are plenty. So I, yes, I think as the cost of deliver, and now that we have AI and AI is going to turn a 10 X programmer into a hundred X programmer and a one X programmer to a 10 X programmer.

Marcus: I mean, you should be able to launch more of those for less money, quite frankly. Um, so I think If you’re an early stage investing, I think it’s a good time. And then on top of all of that, the valuations have, have like gotten more reasonable and the founders have gotten more reasonable. Like all of that’s really great.

Marcus: It’s it’s a, I think it’s a great setup for [00:33:00] seed stage and not just healthcare. I think, I think across the board, if you’re in the seed stage, it’s a great setup. Series a, you know, I think you need to be tightly coupled with seed quite frankly. And then once you get beyond series a, I think it’s really concerning.

Marcus: It’s really concerning because the size checks you need, you need to be writing, they demand IPO, big tech M and a big fortune 500 M and a, or private equity M and a, and all of those things are impaired and not just impaired by the pull away of big tech. They’re also impaired by, uh, the regulators.

Marcus: They’re also impaired by the regulators. Right? I mean, so I don’t know. I just think lots of, lots of challenges for, for growth VC.

Vic: Yeah. Lots. I like our position in the market. Maybe I’m biased, definitely bias, but I think it’s going to be interesting to see how the capital allocators [00:34:00] can allocate enough capital, right?

Vic: Because there are significant endowments, pension funds, big groups that are used to putting significant amounts of money into private markets. I think what we’re saying is there’s not as much really exciting things to put, you can’t deploy 100, 200 million in one deal and get the same kind of results that you used to get.

Marcus: I mean, we don’t have inside information on what happened to OpenView Venture Partners. But we got to kind of look at this scenario. They raised the largest fund they’d ever raised 540 million in March. Right. And decided, you know, one or more of the partners decided they didn’t want to do it. Right.

Marcus: Triggered a key man event, shut down the whole thing. I mean, that’s, there’s something there. Yeah. There’s something there, you know, somebody, for some reason, those

Vic: partners and that brand decide they don’t want to [00:35:00] do it. I mean, they have access to all the best deals and it’s got to be some reason.

Marcus: I think they looked at the numbers and they said, uh, you know, better to give the money back.

Marcus: Yeah. Better to give the money back. All right. Let’s take a break. Let Doug talk about jumpstart foundry. And when we come back, we’re going to shift over to our friends over at rock health and a little bit of analysis they’ve done.

Doug Edwards: Thanks guys for the opportunity to talk about our precede fund jumpstart foundry.

Doug Edwards: My name is Doug Edwards, CEO of jumpstart health investors, the parent company of jumpstart foundry. We’re so excited to be able to talk about, uh, early stage venture investing. Certainly the need for us to change the crazy world of healthcare in the United States. We are spending 20 percent of our GDP north of 4 trillion a year on healthcare with suboptimal outcomes.

Doug Edwards: Jumpstart Foundry exists to help us find and identify and invest in innovative companies that are going to make a difference in healthcare in our country. Every year, Jumpstart [00:36:00] Foundry invests a fund. It raises a fund and deploys that across 30, 40, 50 assets every year, allowing ease of access for our limited partners to invest to help us make something better in healthcare.

Doug Edwards: Some of the benefits of Jumpstart Foundry is there’s no management fees. We deploy all the capital that’s raised every year in the fund. We find the best and brightest, typically around single digit percentage of companies that apply for funding from Jumpstart. And we invest in the most incredible, robust.

Doug Edwards: Innovative solutions and founders in the United States. Over the last nine years, Jumpstart Foundry has invested in nearly 200 early stage, pre seed stage companies in the country. Through those most innovative solutions that Jumpstart Foundry invest in, we also provide great returns and a great experience for our limited partners.

Doug Edwards: We partner with AngelList to administer the fund, making that ease of access, not only with low minimums, but the ease of investing in venture much better. We all know that healthcare is [00:37:00] broken. Everyone deserves better. Come alongside us with Jumpstart Foundry, invest in making the future of healthcare better and make something better in healthcare.

Doug Edwards: Thank you guys. Now back to the show.

Marcus: All right. So in the, I wish we had done it category. Um, I saw this post from rock health on LinkedIn and I thought it was really pretty clever. Um, a really nice analysis, uh, pulling together, uh, Players from different sub sectors, so pulling together, uh, Big Brand, uh, Hospital, Mayo Clinic, uh, Big Pharma, Lilly, and then sort of growth VC backed, uh, uh, Transparent.

Marcus: Right. So three different types of players, all targeting the, um, the, the obesity disease. Two of which we’ve talked about on the show. Yeah. But we

Vic: didn’t put together a pretty Pretty, uh, slide like right.

Marcus: Yeah. And so what they’ve noticed is that, you know, over the last 30 days, you’ve got these three different players all embracing and engaging with [00:38:00] digital health, uh, in some pretty interesting and different ways.

Vic: And, and, um, what I find yours is it’s such a big, um, space. A lot of people interested in losing weight and getting their obesity in control or. So, um, they’re approaching it in very different go to market strategies from like a VC lingo point of view.

Marcus: Yeah. Also somewhat by necessity, right? I mean, I mean, Lily, obviously they cannot have any direct connection.

Marcus: So there has to be independence with the providers, right? Even though they’re wrapping it all in a digital interface and they’re making it fairly straightforward and easy to interact with their brand and get zip bound.

Vic: Right. Right. But even Mayo, um, decided to partner with Amwell. Yeah. Because it’s a faster and probably across the country, uh, go to market.

Vic: Whereas Mayo would not have nationwide coverage like that.

Marcus: And I think it’s brilliant for, you know, the thing I like both in the Mayo case and [00:39:00] the Lilly case is, uh, they both have very recognizable brands, very recognizable brands. Um, and. Brands that generally speaking, most of the patient population can’t interact with directly.

Vic: Right.

Marcus: Right. Yeah.

Vic: Trusted brands, long, long history. And it’s hard for people to get get in.

Marcus: Yeah. Yeah. Yeah, mayo You know, there’s only a couple of actual campuses right where you could actually get there and that they’re not that easy to get into Uh, but this is a way for them to extend that brand which I thought was really cool What did you think about the transparent, uh model here?

Marcus: I mean because they’re already kind of digital, you know focused

Vic: Yeah, I think that is um A placeholder for lots of places where you can also get these medications. So to me, it was the other example of kind of the general, um, I don’t know, kind of direct to patient telehealth that now is offering these services as an [00:40:00] add on.

Vic: Um, I have prime. You know, I watched TV on prime and they started adding ads now, which is a hassle. I’m gonna have to pay them more because I can’t take it, but I now am forced to watch all these ads and they’re all, they’re all pharmaceutical ads trying to get me to sign up for something. Um, and so there’s a whole bunch in there, but, but.

Vic: It was good that they added one to sort of represent that. That’s how I viewed it.

Marcus: Yeah. So anyway, uh, kudos to rock health, you guys are smart. And, uh, this was a really nice way to frame up the evolution and what’s happening in the obesity space. I got to say, honestly, to me, um, now. Now, Amazon partnered with Omada.

Marcus: Is that right? In their big rollout around this stuff with Prime?

Vic: I don’t know. I don’t know if that’s true. That might mean, I don’t know if that’s not right. I don’t recall.

Marcus: Okay, we’ll confirm or clarify in the next episode. I thought it was a partnership with Omada. But around the obesity stuff, correct?

Marcus: Yeah. Okay. Correct. Um, I, I, I think, yeah. ’cause [00:41:00] I, I think, uh, our, our friend Aaron Martin, I think I saw him, yeah. Post that on LinkedIn. But I’ll, I’ll clarify in the next episode. But I think the point is, uh, folks are picking their, their partners. Yeah. And, and, and this dance, you know, the music’s gonna stop here pretty soon.

Marcus: We, we saw the amount of capital and also I think. The robustness of the various solutions, uh, that were in the market, the OMAD is of the world, the, you know, uh, what, what was, what was the one that, that, that partnered with, um, Teladoc, um, like, like, like publicly, I can’t even remember anymore. Yeah, I don’t know.

Marcus: Yeah, because it was, it was mostly like not a great story. Um, but, but anyway, like the, the main point just being, we’ve seen from a VC perspective, the diabetes space is crowded and it’s going to take a lot of money. I think it’s gonna be very, very hard to make much progress in it. And I think people are picking their dance partners now.

Marcus: So, uh, not a place. I think we will be making any investments anytime soon. And

Vic: these medications, I think, um, I mean, [00:42:00] they’re really powerful, obviously. Yeah. But they’re best used in partnership with other with. Diet and exercise and everything else as opposed to just purely relying on a shot.

Marcus: Yep So anyway, uh good work on rock health, uh part We’ll we’ll you know, i’ll continue to follow you guys and hopefully we’ll we’ll catch up and get our act together on on some of this analysis um biden administration, uh So hfma did I think just a good job of sort of framing up the fact that we’re we’re in the middle of a pattern Here we’ve talked about these different things that have been rolling out from the white house.

Marcus: Um as they’re sort of framing up there You Healthcare policy in advance of the campaign season, and I think HFMA really just put a really nice headline on it. Biden administration announces effort to make healthcare more competitive and transparent and sort of focusing on the drug cost, PE ownership and Medicare advantage, all being subject to increased regulatory oversight.

Vic: Yeah, and. Like is always the case with [00:43:00] politics. I love that headline But I don’t know that I have confidence that they will um push into Dealing with the concentration of private equity ownership and actually do some good and so, um, I’m, not even making it more competitive and transparent. Yes How they go about that Um, I think we’ll see well not that I think they’re probably I don’t mean Biden like any political group.

Vic: I think it’d be hard I’m,

Marcus: I think surprisingly, we agree on this one. Yeah, we agree. Uh, for me, you want to be, you want to make more competition, remove the certificate of need, like that’s, you know, low, lower the regulatory barriers, let more competitors come into the market. The, these things are more.

Marcus: Regulatory scrutiny and tightening the screws, and I’m not entirely sure how that creates more competition like you’re [00:44:00] talking about Medicare Advantage. How does that create more competition when it just spurs Cigna to sell off

Vic: right?

Marcus: Yeah, like I, to me, that’s, that’s misleading. So, um, I look. The drug, the drug costs thing.

Marcus: I mean, this show is nonpartisan. Okay. This show is not partisan. We’re just going to, we just say what we feel about different healthcare stuff. The one thing there might’ve been two things, but the one thing that impressed me with the Trump administration was their approach on competitiveness when it came to healthcare.

Marcus: And they talked about like push for transparency, well, cause transparency and also the certificate of need. Yeah. Um, and so, Like that’s actual creation of free market dynamics. Like as long as I was talking with, um, you know, several of the, the board members at HFMA, we were, we were talking about general catalyst, right.

Marcus: Yeah. General catalyst acquired a health system. Why did they acquire a health system? Right. [00:45:00] They acquired a health system because it is no longer viable. To make a big play on technology in hospitals, because Epic controls 80 percent percent of the market, right? Um, Epic got that market share through great execution, okay, but also through government mandate.

Marcus: Yeah. Okay. Now they have a monopoly. You can’t get them out. They’re not publicly traded. So we have no visibility into what’s actually going on there. Their app store efforts make Apple look like open source. Right. Okay. Um, and, and this is what we’re targeting when we’re talking about competition. Like, and Oh, by the way, they also couldn’t create a DeNovo health system because you need a certificate of need.

Marcus: So they literally. Have to spend billions of dollars buying a health system because those are the dynamics at play In our current health care ecosystem when we talk about [00:46:00] competition, so that’s that’s why I that’s why I agree with you

Vic: Yeah,

Marcus: you

Vic: know if you

Marcus: want

Vic: to actually those two points, there’s no question that the conrules are ridiculous I don’t need the government sort of keeping me from making an investment Because they believe the demand is satisfied with the existing players.

Vic: It’s clearly not You Or I wouldn’t be putting my capital at risk. And if I’m wrong, I’m wrong. Um, there’s no question. And then, yes, the, we, we propped up the EMR systems. Our taxpayers did. Yeah. And Epic did win that battle. Best

Marcus: execution, fair play, best execution. That that’s, you know, we’re going to call that what it is,

Vic: but they now have closed the gates and

Marcus: they have 80 percent of the market.

Marcus: I mean, There’s no competition left there, right? And that’s a big problem. Yeah. That’s a big problem. [00:47:00]

Vic: It’s just, forget Epic. It’s a problem in getting the right information to physicians to work with patients and getting the, getting it more efficient. Like bringing tools in to make the whole thing work better is needed.

Marcus: Well, I think it’s, I think it’s different than that. I think we are at a point where hospital administrators basically only do what Epic tells them to do when it comes to technology.

Vic: Yeah,

Marcus: that’s the practical reality of this is they only do what epic tells them to do, you know, and it’s only super strong, like, I’m pretty sure HCA is not a epic, right?

Marcus: And well, they’re the only big one. Yeah, because they’re not going to let the better tech. Yeah. I mean, they’re not going to, they’re not going to allow right. Judith Faulkner to control how they operate their business. I mean, that’s, that’s why yeah. Right. That’s the reality of it, but all these other, you know, and that’s because they’re incredible operators and [00:48:00] we’re going to talk a little bit about the results they delivered in fourth quarter.

Marcus: Unbelievable. Come back from there. Um, JV, you know, fiasco, fantastic. Come back. So yeah, they don’t have to do what she says. Um, but like all the rest of these hospitals, you know, they don’t have the capacity to sort of build out the it and S like HCA did and, you know, build out the, you know, the, the data and haven’t, you know, and Edmund Jackson there for, you know, right.

Marcus: Five, six years to lay out their data strategy and partner with Google, Google cloud and set up an innovation lab and Lake Nona with Mike Schlosser running it like everybody can’t do that. So what are the rest of them do? They outsource their innovation epic. That’s, that’s what’s going on. Yeah. And where’s Oracle and Cerner?

Marcus: They’re just abandoned. No, they’re, they’re doing the VA business. Yeah,

Vic: okay,

Marcus: but doing a business and then Oracle does a lot of underlying data database stuff, right? So that’s where they are. And I and I think they’ve they’ve they know where epic is they’ve sort of figured out their strategy [00:49:00] I Larry Ellison always kind of figured out a way to make money.

Marcus: I’m not worried about him.

Vic: Oh, they’ll make money I don’t know shareholders, but like they’re the one Competitor that could offer something that would be useful, but they’ve decided not to,

Marcus: but, but tell the truth, like over the last four or five years, don’t you feel like you and I have just sort of said, we can’t really invest in like health hospital focused technology anymore.

Marcus: It’s, it’s, it’s, it’s too risky. Yes. You can’t get adoption. Yeah. Yeah. So anyway, um, I, I appreciate the way this is framed up and I think it is the positioning that the Biden administration is taking. However. When I really look at it, I am not sure focusing on PE ownership and Medicare Advantage actual like those do things they do things, but I’m not sure what they do is create more competition, right?

Marcus: That that’s the that’s the part. I’m not sure. I agree with right? Um, or

Vic: transparency.

Marcus: Yeah, and, and just following on with that Cigna is, uh, selling their Medicare business to [00:50:00] HCSC 3. 3 billion. They’ve been trying to offload it. Yeah, they would. They tried to do the Humana thing that didn’t work. So they’re just going to sell it to, uh, HCSC.

Vic: Yeah, I think it’s really smart. I mean, um, the American Advantage business is going to stop growing now or in the next 12 months. And Cigna is kind of getting out the top and they’ll focus on the employer space. And. That’s a hard space, but, but they’re really good at it.

Marcus: Yeah. There will be a business to be had there, but I think the reality is you’re going to have to be full on focused on being a government payer, like total focus, total optimization.

Marcus: We have a bunch of

Vic: friends at Humana. Humana is. We’ll figure it out. They have challenges and MMI right now, but what we talked about,

Marcus: one thing they’re going to do, they’re going to raise rates.

Vic: Yeah, right, right. They’ll, they have enough girth and enough experience. They’re good operators, but you have to be all in at that.

Vic: And when the merger didn’t [00:51:00] happen, so you didn’t have enough, they don’t have enough.

Marcus: Yeah. And good for them. They’re focused on ever North. Yeah. They’re focused on their great consumer book. Um, you know, smart, smart. Yeah. Uh, and then, uh, you know, we, we, uh, talked a little bit about this, but ACA came back, emissions rose 3.

Marcus: 1%, a great quarter, basically recovered the losses that they got earlier in the year and off to a great start for 2024.

Vic: Yeah. I mean, HCA is, I mean, I’m biased because we have a lot of friends there, but, but it is really well run for profit health system. And I think they have several quarters in front of them.

Vic: Oh, yeah. The, the tailwinds that there’s a lot of pent up demand people through the pandemic, and even to today, just haven’t returned to get all the procedures that, you know, they would have gotten if, if that hadn’t happened. And the labor forces is back. And they’re even getting, you know, they have some travelers now, [00:52:00] but they’re getting that down and down and down and it’s a profit machine.

Vic: Once you load in enough volume and high acuity patients. On to the HCA infrastructure. I mean, it’s huge scale advantages. And so, um,

Marcus: it’s

Vic: great.

Marcus: Yep. Uh, and then final story, just kind of our, our societal story. Uh, this is a followup from our conversation with Dr. Nzinga Harrison. Uh, Story came out about San Francisco.

Marcus: And as New York times stories, the headline is, can San Francisco solve us drug crisis, five things to consider. And it’s a comparisons or a tiff attack comparison with what, uh, the policies that were enacted in Portugal, where they had a similar problem and they went through a bunch of similar sounding policies, but as you actually sort of read through the article and the analysis, there were important differences in the way they were actually implemented, especially things like, uh, you know, How they implemented decriminalization.

Vic: Yeah.

Marcus: Uh, and, [00:53:00] and how the police actually responded in, in both situations. Um, yeah. And the,

Vic: and the, uh, I think like the support services to get people to where they can get help as opposed to just let them. Yeah,

Marcus: I found it to be a great read because I think after having the conversation with Nzinga, uh, I’m, I’m constantly looking for the, the framing of the people living with addiction and, uh, the positioning as well as the approach.

Marcus: Right? So the decriminalization and exactly how you go about doing that is a big deal. I think one of the things they pointed out was, uh, In Portugal, they decriminalized it, which to be clear does not mean that it’s no longer illegal. It just means if you are in possession, you’re no longer going to be found guilty of any crime.

Marcus: Whereas in San Francisco, it was downgraded [00:54:00] from a felony to a misdemeanor, but it’s not actually decriminalized. But what actually happened was once they moved it from a felony to a misdemeanor, the police basically stopped enforcing at all.

Vic: Well, yeah, it was misdemeanor. And then also the, the assistant DAs.

Vic: Sort of said they weren’t going to pursue anything, right? Right. So so for the police point of view, like why should I chase this guy and bring him in when you we’re just going To let him go again.

Marcus: Exactly. Exactly. So so again, I mean We’re not saying what’s right or what’s wrong. We’re just saying it’s it’s important to sort of understand the nuances in how different um Different policy approaches are actually carried out And the the truth is nobody’s got the answer to this certainly not san francisco I mean, I think that what this article Ends up leaving you with at the end is San Francisco has a crisis on their hands.

Marcus: They have not figured it out They’ve tried a bunch of different policies many many people are dying Yeah, I

Vic: think I think their policies have made it somewhat worse Uh, but I I completely agree by

Marcus: the [00:55:00] data, right? Yeah

Vic: from from this article Yeah, but I agree with you. I mean the conversation with nzinga was really Eye opening been really helpful to get her perspective, like actually doing this work day to day and it’s a huge.

Vic: It’s a huge issue for society. So I don’t think I have the answers, but I want to keep doing reading pulling things in. We’ll link to this article. It’s pretty long. But it’s really good. There’s a lot of detail in there, and we’re going to have to figure out how to find answers and Zynga and our listeners and health systems and payers.

Vic: We’re going to have to figure this out and learning from places. That have already gone through it is, is one way to not make the same mistake again.

Marcus: Yes. Uh, one of the, one of the other things that they point out is that, uh, I, I believe they really were saying not so much San Francisco, but more America is dealing with a far more [00:56:00] serious and aggressive fentanyl issue.

Marcus: Yeah. Than, than most places in Europe and South America are dealing with. Right. So that’s an important, um, difference to sort of point out and Fentanyl just. Is it, it’s a different drug. And to me that calls back to when Nzinga was saying, do you treat all cancers like breast cancer? Right. Um, you know, different drugs require different treatment protocols.

Marcus: And so are you taking a treatment protocol for a drug that is less deadly or less addictive or has less side effects or whatever, right? I mean, again, it just gets down to us not thinking about this as one big bucket, you know, slapping a moral label on top of it, but really getting into thinking about this as diagnosing.

Marcus: Disease states, um, you know, at different stages and looking at each one of these substances and looking at the characteristics of that substance and realizing, you know, reverse engineering the addiction process for that specific substance is its own work product, its own effort.

Vic: Yeah, and, and, I [00:57:00] mean, I think it starts with not blaming the victim and trying to help them, and that, if you start with that frame of reference, then you can dig into fentanyl versus other, other drugs, and there’s a lot of good people working on it, but, The unintended consequences in san francisco were not helpful.

Vic: Yeah, so just learning from that as we think about other other cities other geographies health systems payers Our our audience has a lot of influence and so we need to I need to learn more And study this but we’ll keep bringing topics like this that just take a slightly different view on it I think

Marcus: yeah, and and look this this this is a health care issue.

Marcus: Uh, it is a behavioral health issue and It is leading to many, many tragedies, many broken families. Many broken communities and the reverberations of these are going to be felt for generations. And [00:58:00] so, uh, it’s, it’s, it’s a, it’s a big deal. It’s a big deal. And I think we all owe it to our families and our communities to get better educated about it.

Marcus: I feel like when I’m reading this, uh, The, this article or other articles now after talking to and not just this conversation, she’s a friend. So I’ve talked to her many times. I feel like this is one of those topics where I have to actively like rewire my brain, you know, because, because the default.

Marcus: Thought process and thought patterns and labels and things like that language, the language, the language exactly is, is not right and not helpful. So, uh, yes, we want to continue to encourage our listeners and viewers to educate yourself on this and, and please read this article. And again, uh, you know, we’ll, we’ll link to it again in this, in these show notes, please, uh, check out in Zynga’s book on addiction.

Vic: All right. That’s it. We solved all the problems in the world.

Marcus: Uh, [00:59:00] look, um, I, I think that I’m just glad January is over man. January was a hell of a month, dude. I just, I just got to say this, this, this month, January was a hell of a year. Um, and I’m glad one

Vic: extra day in February. Listen,

Marcus: I’m, I’m hoping February is easier and in all the ways, but I’m glad we got through it.

Marcus: We got through it together and I’m looking forward to, um, what February holds.

Vic: I think it’s, I’m optimistic. So can’t be a VC without being optimistic. So I’m sort of always glass half full.

Marcus: Yeah, that’s right. That’s right. We’re, we’re, we’re, 50 episodes too, man. And now that we’re doing two a week, we’ll, we’ll, we’ll be there before we know it.

Marcus: Yeah. All right. Well, until then, see y’all next week.