Welcome to The Benchmark, powered by Blend. In this video series, Blend’s executives meet with leaders across industries to share insights about growth and success during a time of extraordinary change.
For this episode, Blend President Tim Mayopoulos met with Annie Lamont, the co-founder and managing partner of Oak HC/FT, a venture capital firm that invests in healthcare and fintech companies. She also serves as First Lady of Connecticut; her husband is Ned Lamont, the state’s governor.
Tim and Annie had a wide-ranging conversation. They discussed the trends they are both seeing in healthcare and financial services and how the coronavirus pandemic, while painful and economically devastating to many Americans, has accelerated the pace of digitization for those two industries as well as many others — a potential bright spot in an otherwise trying time. Annie shared why she is so passionate about healthcare and what she expects to see in the sector in 2021. She also discussed what special qualities she looks for in entrepreneurs.
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Explore four takeaways from the video
Pursuing a passion for access and affordability in healthcare
Annie is widely recognized as one of the nation’s foremost healthcare investors. She sits on the boards of several healthcare companies, has been consistently ranked among the top VCs in the U.S., and was the first recipient of the National Venture Capital Association award for excellence in healthcare innovation. Tim opened their conversation by asking what initially drew her to healthcare. Annie responded with a personal story.
“Healthcare has been a passion of mine for many years,” she said. “I actually had to drop out of Stanford my junior year because my father got very sick and my mother called me and said, ‘You have to come home, we cannot afford to write the check for Stanford for your junior year.’ So it really fueled a passion in me about access and affordability around healthcare. And that’s what I’ve dedicated myself to doing for the last 20 years.”
And what about fintech? What was the genesis of Annie’s other passion for supporting emerging companies that are leveraging the power of technology to transform various aspects of financial services?
“FinTech was interesting,” explained Annie. “In 1999 and 2000 (during the dot-com boom), healthcare was not all that relevant because companies that had no revenue were providing 50 and 100 times returns for venture capitalists. Healthcare, which has a nice steady return, was not really interesting to my tech partners. So they asked me to find other things.
“So I found something else and that was fintech. I ended up creating a group around those areas, and there was a lot of overlap between the two. And I ended up loving learning. That’s what being a venture capitalist is — a lifelong learning process — and I loved exploring a new area and making it my own.”
For all its pain, the pandemic has had a transformative effect on digital adoption
Tim and Annie then discussed a topic that has been a recurring theme during this year’s Benchmark episodes. They talked about how, as we reach a turning point in the coronavirus pandemic, it may be time to reflect on the moments of triumph we can look to as we collectively recover. Alongside all of its pain and economic distress, the pandemic has also been a catalyst for digital infrastructure improvements that stand to benefit consumers over the long term.
“The pandemic has been absolutely devastating for many parts of the economy,” said Annie. “And yet for the technology-driven, API-driven part of the economy, it’s been the most amazing accelerant you could possibly have. It’s like fuel on the fire.
“We thought there was a lot of e-commerce before and then you realize there could be so much more,” she added. “We’ve also seen a massive increase in mortgages and lending. What’s interesting is all of that had to be done digitally. People don’t want to go to the bank, people don’t want to go to an institution.”
“You use some of the same words I use,” said Tim. “People want to be able to apply for a mortgage or auto loan while they’re in their pajamas, on their couch at midnight, or watching TV. There may be times when they want to go into a bank branch or an office, but most of the time they really don’t. They’re perfectly happy serving themselves, but it has to be simple, easy, and cost-effective. The pandemic has accelerated that in a really phenomenal way.”
A moral compass + intellectual honesty = a great entrepreneur
Tim said he was curious about what qualities Annie looks for in entrepreneurs. “There are a lot of people with enthusiasm and smart ideas,” he said. “But what are you ultimately looking for when you sit down and meet the founder of a company?”
“It starts with a moral compass,” Annie said. “They’ve got to have that. If I ever questioned that that’s not there, I don’t care how much money I’m going to make, I’m just not comfortable. After that it’s confidence — not arrogance — it’s the confidence of intellectual honesty to hire people better than you and to admit what is or isn’t working. You can’t solve problems unless you can highlight what the problems are. So it is really important to us for an entrepreneur to be able to look at problems with a clear eye.”
“Your point about a moral compass certainly resonates with me,” responded Tim. “I remember some of the best advice I ever got was from the CEO of a company who said, ‘It’s really hard to do good business with bad people.’ ”
“As to your point about confidence, at Blend we have a set of values we subscribe to. The one that really captures, in my mind, the essence of the company is this notion of confident humility. As you say, not arrogance, but enough competence to know you can solve problems, with enough humility to actually appreciate that they are complex problems and there’s a lot you need to know about them.”
Reasons to be optimistic about the future of U.S. healthcare
During their conversation, Annie talked about the healthcare trends she’s seen this year during the pandemic, and what she foresees in 2021 and beyond.
“In the short term, obviously Medicaid enrollments are up,” she said. “People enrolling in the (health insurance) exchanges are up. I’m so glad we have that but, frankly, Obamacare and the exchanges are still too expensive for the average family. In the longer term, it moves the dialogue along in terms of costs and access, and how we have to think about a restructuring of our healthcare system. The beauty of what’s happened is that the move to virtualization and home care does lower costs.”
“It sounds like you’re actually quite optimistic about this,” said Tim. “I think for most of us who are more casual observers of the healthcare system, we’re pretty discouraged by the whole thing. It seems like the cost of healthcare care just keeps going up. But it sounds like you’re pretty encouraged.”
“I am,” said Annie. “There are some amazing and really wonderful transformative things happening.”
Want to know what Annie Lamont’s three children have taught her about fintech?