Innovators: Avoid Healthcare

NVIDIA founder and CEO Jensen Huang has become quite the media darling lately, due to NVIDIA’s skyrocketing market value the past two years ($3.3 trillion now, thank you very much. A year ago it first hit $1 trillion). His company is now the world’s third largest company by market capitalization. Last week he gave the commencement speech at Caltech, and offered those graduates some interesting insights.

Jensen Huang at Caltech. Credit: NVIDIA

Which, of course, I’ll try to apply to healthcare.

Mr. Jensen founded NVIDIA in 1993, and took the company public in 1999, but for much of its existence it struggled to find its niche. Mr. Huang figured NVIDIA needed to go to a market where there were no customers yet – “because where there are no customers, there are no competitors.” He likes to call this “zero billion dollar markets” (a phrase I gather he did not invent).

About a decade ago the company bet on deep learning and A.I. “No one knew how far deep learning could scale, and if we didn’t build it, we’d never know,” Mr. Huang told the graduates. “Our logic is: If we don’t build it, they can’t come.”

NVIDIA did build it, and, boy, they did come.

Credit: NVIDIA

He believes we all should try to do things that haven’t been done before, things that “are insanely hard to do,” because if you succeed you can make a real contribution to the world.  Going into zero billion dollar markets allows a company to be a “market maker, not a market-taker.” He’s not interested in market share; he’s interested in developing new markets.

Accordingly, he told the Caltech graduates:

I hope you believe in something. Something unconventional, something unexplored. But let it be informed, and let it be reasoned, and dedicate yourself to making that happen. You may find your GPU. You may find your CUDA. You may find your generative AI. You may find your NVIDIA.

And in that group, some may very well.

He didn’t promise it would be easy, citing his company’s own experience, and stressing the need for resilience. “One setback after another, we shook it off and skated to the next opportunity. Each time, we gain skills and strengthen our character,” Mr. Huang said. “No setback that comes our way doesn’t look like an opportunity these days… The world can be unfair and deal you with tough cards. Swiftly shake it off. There’s another opportunity out there — or create one.”

He was quite pleased with the Taylor Swift reference; the crowd seemed somewhat less impressed.

Some of those graduates will probably end up working on artificial intelligence, perhaps at NVIDIA (he announced at the beginning that he was recruiting). Others will get snapped up by other Big Tech companies. More than a few will start their own companies. And a fair number will probably end up working on healthcare, in one way or another.

Healthcare needs bright people. It needs innovation; lots of it. It needs to be more efficient, and, hopefully, more effective. There’s no shortage of new ideas or money for them; according to Silicon Bank, venture capital firms poured $19b into healthcare in 2023, after $50b for 2021-22. It is already incorporating A.I. faster than I might have predicted, such as in drug development, where it is said to be “revolutionizing” the field. A.I. is also rapidly starting to “copilot” doctors.

But, I fear, these all seem like market-takers, not market makers.

Ten years ago I wrote Getting Our Piece of the Pie, expressing my concern that healthcare innovators were more interested in getting their share of the nation’s then $3 trillion spending (it’s now $5 trillion). “We need innovators who don't want a slice of the existing pie,” I wrote, “but are willing to throw it away and make a new kind of pie.”

I think Mr. Huang would agree.

The internet should have transformed healthcare. Electronic health records should have transformed healthcare. Digital health should have transformed healthcare. But they didn’t. Sure, they changed healthcare, but healthcare first tried to ignore them, but then simply absorbed them in its big bear hug. “OK,” it said. “We can use you, but don’t expect anything to be cheaper or smaller, and don’t expect any of the major players to go away.” Now it’s doing the same with A.I.

Everywhere you look in healthcare, there are competitors. To be more accurate, everywhere you look there are consolidators, because many parts of our healthcare system prefer to dominate markets than to compete in them (e.g., Epic, UHC, and many local health systems). But an innovator would be hard pressed to find a market niche without competition. And the thought of doing something where there are no customers is anathema to most healthcare innovators.

Honestly, I think healthcare innovators who start building things thinking about patients, doctors, hospitals, pharma/PBMs, and health insurance companies, well – I don’t think they should bother. That paradigm is hitting a dead end. We need new paradigms.

When imaginary numbers were developed during the Renaissance, no one expected that they’d be useful for anything, much less than they’d be integral (pun intended) for electrical engineering and quantum mechanics. Neither of those fields even existed yet. Alexander Graham Bell was more interested in helping the deaf than in inventing the telephone. And Bob Taylor of ARPA (now DARPA) didn’t expect to create the internet when it came up with ARPANET.

Big, bold ideas find – create -- their own markets.

If you want to make a mark in healthcare, look for the zero billion dollar markets. Look for the things that customers haven’t yet realized they have a need for. Look for the things that no competitor is interested in (or hasn’t thought of). Look to build things with the logic: “If we don’t build it, they can’t come.” Look to change the world, not just to make healthcare a little less bad.

If you do all that, or some of that, perhaps health or healthcare will benefit as well, even if it’s not what we think of it as “health” or “healthcare” now.  Find your own NVIDIA.