The cavnessHR podcast – a talk with Joshua Lawton
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Jason: Hello and welcome to the cavnessHR podcast. I’m your host Jason Cavness. Our guest today is Joshua Lawton. Joshua, are you ready to be great today?
Joshua: I'm always ready to be great.
Jason: It's good to hear. Joshua is a recovering Techie. Well, I don't know if there’s anything as a recovering Techie.
Joshua: Once and always.
Jason: A full time entrepreneur, lifelong investor, part time writer and once upon a time combat medic. He's currently the co-founder and managing partner of Health Hat. A health care technology company that assists hospital networks in clinics, quickly mitigating operational problems, therefore increasing the revenue of patient satisfaction. He is an alumi of both Johns Hopkins University and McCombs School of Business at the University of Texas Austin. That's quite an impressive double double there, Joshua.
Joshua: Thank you very much.
Jason: Can you talk about you know what actually is Health Hat? What are you working on?
Joshua: So that's a really great question. Health Hat was started by both my partner and I on the idea and belief that the practice of medicine as a business is broken and flawed..
Joshua: So, one of the things that people actually don't realize is that as hospitals get larger, as they take on private practices the costs actually go up. It's for a very important reason. It’s the idea that the market actually constricts and becomes smaller as hospitals get larger and therefore there isn't as much access. The other part about that is most doctors, most nurses, most PA’s, most individuals who get into the actual practice of medicine are there because they really care about patients.
Joshua: Because they care about helping individuals and not necessarily running a business. So, what we do is we grab the micro data, the data that really lands on the floor. Whether it's in pen or paper or maybe sometimes Excel if we’re lucky and even the white board. What we do is we provide that data so that apples to apples comparisons can occur. So that we can increase margins, increase efficiencies and so hospitals and clinics make more money on their end. It's for you and I, we actually get a better level of care as patients. So, we do that through a data collection tool. Then we do that through analytics and a dashboard that's easily identifiable and understandable by most individuals. So that's what we do at Health Hat.
Jason: Because most people when you think of innovation, I mean health care is not the first thing you think of is it?
Joshua: No, funny enough the average physician is 55 years old and has a fax machine which also, I mean, assumes that they also have an AIM screen name and also an AOL dot com account.
Jason: The fact that it still works I'm sure I mean it still serves a purpose right?
Joshua: No, it does it does. That's a little bit of you know a joke. But in reality the reason why they have that is not just because they don't understand e-mails and that kind of stuff. Also, because Medicare has some requirements for them to have a fax machine. The reality is it's going the way of the dodo bird. But that really shows you how far behind health care and health care advancement is in comparison to most other industries that you and I are familiar.
Jason: Now you are based at Austin. Is your business still in Austin right now or are you trying to take it statewide, nationwide? What’s the master plan for you?
Joshua: Sure. I mean the master plan is to, no matter what happens in Washington D.C with health care, is to provide a great product that can go worldwide. Because really what we're focused on is operational data and how do you become more efficient. So, while our focus right now is on health care. The realities s to actually reach a much wider audience. So, for us focusing first on Texas as a sizable market. Fifty four percent of all primary care physicians in Texas are actually owning their own private practice versus the rest of the country. It's actually a very high capita number. With that, in Texas alone there's more than enough market for us to get over the cost as we say in the startup world and become a much larger product .
Jason: You have previous experience as a combat medic. How does your combat Medic background prepare you for this?
Joshua: Well you know being a combat medic is really this idea and it's strange and it's adorable because we're used to EMTs being able to do certain things. Combat Medics actually were the precursors to the physician assistance, individuals can do surgeries, can do operations. Can do pretty much everything that an M.D. who oversees them whether directly or indirectly allows them to do. So, as a combat medic you get this unique experience of actually being a physician extender.
Joshua: In many cases actually being the sole medical provider and medical authority on the ground. While at the same time you have to run clinics whether it's back stateside in Europe or even sometimes in combat. To really understand the holistic version of both providing care and also provisioning the business of care. Which is something that in general in a billing world most people start off they want to become EMT or a CNA or an RN. That's where they focus on first and they never really actually get into the business of health care and medicine until much later in their careers at all.
Jason: So, I’m gone put you in a spot here. What school was tougher? John Hopkins or McComb's?
Joshua: ( laughs)
Jason: Which was tougher and what was the funner place to be?
Joshua: I would say the most, definitely the more fun place to be was McComb's school business.
Joshua: The camaraderie at University of Texas at Austin far exceeds that of Johns Hopkins by far. I think, what was harder? That's actually a good question. So, in my experience because of the truncated nature of the program I was in at McComb's. That probably made it a little bit harder. It was also because while I've always been working full time going to school. It was something that really focused me. What I was trying to get done because we're going to look at starting a business coming out of school. It made it all that much more real. You get out of education what you put in. When it came to my time at McComb's. I put in probably a lot more than I put in at Johns Hopkins.
Jason: So, as you're growing your business. How receptive has health care been to you?
Joshua: You know the funny thing that we get inside of health care is we actually get a very good reception when we go to hospitals, when we talk to doctors, when we talk to clinics because they understand the difficulties that they're having.
Joshua: It's actually when we go outside of health care. Whether it's going to VCs, raising money from angels. We get a little bit of a pushback. It's because we've done such a great job in society in medicine. Assuming that everything lives inside of your medical record. We set up all these exchanges and we really position these as the be-all and end-all. When in reality you can know in your electronic health record like your blood pressure was 120 over 80. However, all the processes that it took to get you to that point, we don't know, we can know discharge times in hospitals for women who gave birth, perfectly natural births and beautiful babies. We can know the average length to stay on the electronic health record.
Joshua: However, we can't tell the differences of why there are operational diffs. Why does one clinic have a marker like the stay of the other and they’re in one of our pilots is simply as it is. We found that one of the root causes of differentiation between length was due to the number of social workers supporting the different clinics because they come at the very end of the discharge process. You can imagine if one or two of them called out sick, get in a car accident. Actual things that happen in the daily business can have an adverse effect on and because of that we were able to save hospitals thousand dollars a month just on discharge time alone just for two clinics.
Jason: You brought up a good point that doctors are not trying to run a business. How come they don't know how to do this? I always wondered about this.
Joshua: I've been talking with professors. We actually have an individual in the medical school on our advisory board. We've talked to them a little bit about why it is that the business of medicine isn't necessarily taught. I think it harkens back to two main things. In my opinion is that people get into business because they really get excited by business. They really get excited by SWOT analysis.
Joshua: Exactly. Then there are people who, that is not what they want. I believe that most doctors and nurses & PAs really fall into that and “I just can't practice medicine anymore.” When it comes to actual business and I really remember that it wasn't too long ago that doctors would readily accept goods in kind. So, there are still doctors in place in North Dakota and other places you know patient comes in for a cold or for a checkup. The doctor can do this themselves and they pay this individual with you know baked goods and you know it still literally happens.
Joshua. So, it's this idea that medicine has been practiced as a business hasn't been very successful. The last part about that which really ties into the second part is that Americans in general are used to eating steak and lobster every day but only paying for McDonald sandwiches.
Jason: It’s American Way, right?
Joshua: Exactly, and with medicine that has an adverse effect on the market and how consumers actually interact with the product.
Jason: Joshua talk to us about a time you were successful in the past. What you learned from the success and what we can learn from the successes you’ve had in the past.
Joshua: You know it wasn't too long ago that I was working in the federal government on a major Presidential initiative. One of things that you learn really quickly in Washington D.C. is that it doesn't necessarily matter if an individual, even the President is telling a whole bunch of people what he or she wants. Because an organization will find a lot of reasons not to do what needs to be done. One of the things that would always frustrate me at that time was the negotiation process and compromise process. I'm very much a goal oriented mission focused individual. So, when other people aren't necessarily the same. It's difficult to come to a compromise to get things done.
Joshua: However, one of the best books I ever read in business school was ‘Getting to Yes’. It was the idea that you don't negotiate on personalities you negotiate on points. I think that's a lot of times, we forget that the person you know sitting across from us. They have their own reasons in their mind what they’re trying to do.
Joshua: We'll find that we're going to get into a lot less arguments and a lot less you know lose-win type of negotiations. That's one of the biggest things to remember is that we're all trying to come to the right answers. We are just come coming from different angles.
Jason: It's a very good point. So, let’s talk about a time that you failed in the past. What you learned from this failure and what we can learn from this failure.
Joshua: Oh, my God. You know I think most of… the best things to learn from actually is failures. Right. It was when I realized that sometimes burning a whole village down to get where you want to go wasn't the best way.
Joshua: We all have our natural tendencies and that's I think is the first lesson. To know your negotiating style, know what motivates you in life and then figure out how to work around people who don't have the same motivations. Who don't have the same way of negotiating and don't have the same way of perceiving things.
Joshua: For me, my biggest lesson was, I was in this very heated project and things weren't working out properly. I was told to go in and fix it. I was a little bit like a ball in the china shop. I started putting things in order, fixing it and people were getting their egos bruised. Because of that efficiency start to decrease as people started do a little bit less.
Joshua: I remember I was sitting at a table one day in a conference room on a conference call. I just wanted to reach out to the phone and get them do exactly what I needed them to do. I know exactly where they're going. All of this conversation was pointless. We had to get to where we needed to go, before I could touch the unmute button. One of the consultants who worked with me put his hand over top of it and said, “Josh stop” they’re going to get exactly where you need them to be.
Joshua: They just need to get there themselves. I looked at him and I go. So, I just need to be a smiling Socratic ninja. I need to ask questions to get them to where I want to be. My failures have been when I try to force people to get where I want to go. It's burning down the village. What I learned from that is really sometimes the best way to get somebody to where they want to be is for them to realize that's where they want to go to begin with.
Jason: So, this is like something that they forget themselves?
Joshua: Theodore Roosevelt, has a really great quote. It's “the speak softly but carry a big stick. In business that's sometimes the same way. The reality is if you're can speak softly and get people to go where you want, phenomenal. But sometimes there has to be the stick and the carrot. Sometimes they have to know that you know, it's not your intention or your desire to burn down a whole entire village. However, if eventually that doesn't move them to actually change. Now that village is going to be burned down, people are going to be fired. You have to be able to walk that line very carefully.
Jason: Yes. I think it's a challenge for all of us. Oftentimes, we know how to do things better than they know how to do it. So, we want to do it our way. But we have to be learn to be patient and let them figure it out. In the long term, it’s going to be better for both of us. Because it will be less you have to do once they can do it on their own.
Joshua: I had a really good lesson myself as well. It's a very hard lesson. You know it's a very hard lesson for people to learn. Especially, individuals who willingly put themselves into leadership roles and I think you'll see that from the young stages of children on the playground. When there's a game to be had, who steps up and starts, those same kids that end up doing that for themselves with the same kids. Who start being product managers, project managers, starting companies and going forward.
Jason: This is a very good point you bring up. Next none of us get to where we are by ourselves. I want to you talk about someone who has helped you in the past and how they helped you.
Joshua: I completely agree that none of us get to where we are by ourselves. I also think some of where we want to go is based on luck. It's the idea that an opportunity comes up and we prepared ourselves to be ready to take full advantage of that opportunity. I think there was two individuals who were the biggest helps in my career after the military. The first one used to work with at Oracle. I used to work for the Vice President of business development for North America. A gentleman by the name of Bud Langston. https://www.linkedin.com/in/bud-langston-57a9361/
Joshua: One of the things he told me was that “Josh you know you're going to have a great career. But right now you don't have all the tools in your toolkit.” I got pretty frustrated when he said that. But he was right and it was one of the things that set me on a path forward. Putting those tools in the toolkit; going to John Hopkins, getting certifications and really prepping myself.
Joshua:The next one is Brenda Nova, who was a partner I believe at the time at Booz Allen Hamilton. She convinced me to come on over to Booz Allen. Where she connected me with individuals up in D.C. and from there started my career after Oracle in high research and development consulting and kind of…. It was really what propelled me from one place to the other. In general, those were the two people who really gave my career, you know a kick in the butt.
Jason: I know with John Hopkins, McComb's, Oracle, and your startup business. No one can deny you're not a person without a lot of drive and focus. It's very impressive.
Joshua: Well thank you.
Jason: So how does a potential customer of Health Hat find you? I mean how does that happen?
Joshua: There's two big ways to find us. There's the first which is www dot Health-Hat dot com that's HEALTH hyphen Hat dot com. The other one is on Twitter. You can follow us at real health hat (@realheathhat) and you'll be able to come see us. So that's exactly how they can reach us and we respond very quickly. If there's anybody who is interested in learning a little bit more about health care or more about software or even what we do. We're always willing to talk with people.
Jason: For our listeners, we will have all those links on our show notes. Joshua, we're about to come to the end of our talk. Anything else you'd like to talk about?
Joshua: I honestly think that it is important for people to put themselves out there. Jason, you and I met online. We share natural demographics and affiliation groups. I think for the vast majority of people whether, you're starting a business, whether you're trying to figure out where you want to go to or whether you're just trying to find a career. One of the key things you can do is actually put yourselves out there. You just never know what's going to come of it. But nothing will come of it if you don't ever put yourself out there.
Jason: Somebody said you miss 100 percent of the shots you don't take.
Joshua: Amen to that.
Jason: I mean everybody wants to help you out. I think like 99 out of 100 people will want to help. One is going to be a troll and be a jerk. But the rest will be happy to see you succeed.
Joshua: You got to know your own value in the startup right. I mean, you're going to be told no. I've been told NO more times than I can remember. I have been told no on different companies I've done. It's a bad idea, this is not a good idea and it turned out because of hard work taking feedback and changing a little bit, pivoting here, pivoting there. So, you could have a thick skin but you also have to believe in what you're doing. Because becoming an entrepreneur or starting a business, changing careers. It's a huge step. If you're not certain, you're not going to overcome.
Jason: You have to be confident in your abilities and trust that you know what you're doing. There can be naysayers out there you know.
Joshua: Exactly. If you ever want to feel better about yourself just take a list of all the people who say NO to you. That way you can remind yourself when you get the YES.
Jason: You only need one good yes.
Joshua: Well that's, I mean that's part of the luck right. That's part of the… you know, it's a lot. It's almost a little bit like combat. Combat is 90 percent of the time your deadly bored and 10 percent of the time you might be dead.
Joshua: Same way with startup's. You spend a lot of time working, perfecting, pitching perfecting decks, perfecting marketing. Meeting with people and only 10 percent is the deciding factor.
Jason: Someone might want to do a meeting with you and you're too tired and you cancel it. But that could have been a meeting that would lead to another meeting that would set everything up for you. You just never know.
Joshua: Funny enough I was I was going in to see my doctor and I was coming from some meetings and I had my health hat t shirt on. He's literally sticking a tube down my nose. He takes a look at my throat and he stopped. He goes “what's Health Hat?” So, I started talking with him. Sure, enough that led to demos and the sales opportunity. Literally I was just going to doctor's office and somebody was interested. Which is important for entrepreneurs to realize. There is something about shameless marketing that is important in the startup world.
Jason: You've got to sell every minute of the day.
Joshua: I mean it's really 100 percent at the end of the day. If my lighting was any better, I’d be wearing a health hat right now.
Joshua: Because that's really what you have to do. Part of being a startup, part of being in the community, part of getting a product out there. Is you need to be on their top of mind. Startups in many cases especially before they go national are local. So, if you're in Austin, if you're in San Diego, Boston, New York City, if you are doing in my case healthcare efficiency.
Joshua: You need to be the best one out there, you need to be the first company that people think about. Otherwise, you're going to lose that top of brain. When they go and they look at people to provide a business to connect with VCs, connect with angels or connect you with talent. You're not going to be the top tier and you may just fall off completely and be forgotten.
Joshua: You have a huge number of workspaces which capitalize on this entrepreneurship dream. People sell $300 to $400 a month hot desks and nobody really does the cost benefit analysis of what am I really getting out of all this. You know if I spent $300. I better be getting $600 worth of value out of that organization. Lots of people don't realize that's what it really takes to be an entrepreneur. People don't realize that we all have to eat.
Joshua: So, if you have to work a part time job or maybe be a full-time job while you're getting a startup to be a reality. If that's the case you're working 60-80 hours a week. Some of the things you let slip family, life, friends, enjoyment and some of the other things. You just have to fully focus yourself and realize it's going to end one or two ways. It’s either going to end with success and you can kind of ramp down a little bit or it is going to end in failure. Then you have a whole bunch of time to sit back, relax, get a martini, sit on the beach and figure out your next move.
Jason: I think it was said that entrepreneurs work hard now so they don't have to later on or something like something like that.
Joshua: There's a lot of people who go out there and spend all their money all day. It's really the traditional, you know the ant and the grasshopper story. Where the ant has worked and somehow the grasshopper just walked around. So, the grasshopper had nowhere to go.
Jason: It's a good analogy
Joshua: It's the same thing with business and the same thing in life. I mean the reality is there's a lot of individuals who I started with early in my career. They spent eight hours a day and then they went to a bar after work. They've done that now for over a decade and a half, while I would spend my 10 hours at work. Then I would go to school or get a certification or do something else. You can tell, I think, near our midterm careers and later who's really put in the work. Who has been successful and a little bit lucky and who really hasn't put in a lot of work and just coasted.
Jason: Or somebody on 3 softball teams and watching every episode of Game of Thrones.
Joshua: I'm a big believer that I have what I believe success in life is and what I strive for. But you know if being on three softball teams and watching Game of Thrones every week is success for you, go for it. My goal in life on every Sunday is to get all my work done so come 8:00 Texas time I can I can actually watch Game of Thrones. But that's my goal. If somebody doesn't have that goal that's fine. But you know greed is really the devil you know. Don't be greedy for something you actually didn’t work for yourself. Sometimes the best stories are going to be from people who were kind of successful. I remember we had this one individual come in to our class to speak almost every week and he had been widely successful.
Joshua: He's been running his business for seven years and he was just at a point where he's too big to be bought out by most companies. He just wanted somebody to buy it. He just wanted to get done with it. Where all of us would really want to be but he was “I just want to be done. So, you know success is really what we make of it.
Jason: As a startup entrepreneur, you have all these resources out there. Some are free, some cost money. I mean just like literally thousands of them. You know I get e-mails all the time. How do you, from your personal experience. How do you go through all the clutter and information overload and decide what's best for you?
Joshua: I actually have in my office a component board. A board that I can take a look at and I can see these are the things that matter to me in life. These are the tasks that I need to achieve to get to where I want to be in the company. Anything that doesn't jive with that falls to the side. For me it's really taking a look and being laser focused on what you want to get done and letting the rest fall apart.
Joshua: The guiding light for me also is equity is very, very expensive to own and very cheap to sell. You're going to have a lot of people come here and say ‘come to my accelerator, come to my program’ and I will get you ready for series A financing in 15 months. But I'm going to get 6 percent of your company. The first question you need to ask them is what is your success rate? What do you think the valuation is going to be?
Jason: Then my question is after the accelerator is over, like a year from now. Are you still going to be advising me and helping me? What's the deal after that?
Joshua: Exactly. A lot of them just think they're going to collect on that right. So that they have an incentive for you to grow in value and get bought out and do that kind of stuff. But in general, once you're done, you're done.
Jason: I want to thank you very much for your time and I know you are a busy person. Got a lot going on. Enjoy that Texas weather, enjoy that Texas barbecue.
Joshua: Yeah definitely. I appreciate you taking the time to talk Jason.
Jason Cavness: To our listeners thank you for your time too. Really appreciate it. And remember to be great every day. Thank you
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