From Design Thinking to $1 Billion Healthcare IPO: Omada’s Sean Duffy + His Former Boss

0:00I mean, there was this one woman where we're like showing her the prototype and she was just imploring us to build it. She was like, you have to build this. Go build this. Please build this. It needs to exist. And we're like, yes, ma 'am. We're going to go build it for you. Welcome to Leap Forward, a show about founders and the people who believed in them before anyone else. On today's episode... I'm Sean Duffy. I'm the co-founder and CEO of Amada Health. When Sean was a medical student, he took an internship at the legendary design thinking firm IDEO that would put him face-to-face with one of America's overwhelming systemic health problems.

0:36You know, we interviewed patients, you know, people that had prediabetes, obesity, and asked them, well, what was offered to you? It was like they got a pamphlet and a prescription and then asked to come back in six months. He knew right away that this could be his life's work, but how to turn the idea into a solution and a company, that took a lot longer. To learn more about how that happened, I also talked to Sean's boss at IDEO, David Webster. We put Sean and Adrian on it. They're like, I think we can probably do better than see you next year. And now, Sean Duffy.

1:18Why don't we start at the top? Just, you know, where did you grow up? What did your parents do for a living? Yeah, sure. So I grew up in Colorado Springs, a little bit south of Denver. My dad was an electrical engineer. So, you know, life with dad was all about engineering. And then my mom was a nurse. And I think I was kind of drawn to health care because it felt like a good, just a good thing for the world. You know, neat way to contribute. So, you know, I think some of her stories as a nurse really did kind of awaken me to the power of health care. So, you know, I think even from day one was somewhat of a mix of both.

1:45How would you describe yourself as a kid? What kind of kid were you? What kind of things were you interested in? I was a little bit of a late bloomer. I mean, I think, my God, I think I hit puberty like junior year in high school. So I'm more oriented toward the Dungeons and Dragons table than the cool kids table. But I was interested in a lot of things. I think fundamentally I like to build things. I loved computers. Any new bit of technology that came out, I wanted to play with it. You know, lived and breathed, roller coaster tycoon, the computer with the turbo button that you'd always leave on.

2:13And I just loved creation. And so let's talk about going from kind of high school off to college. How do you decide what to pursue in school and where to go? I did my undergrad at Columbia. and studied neuroscience and behavior. I first thought I would be an engineer, but just realized there could be a world where I combine science and this slight interest in health. And at night, throughout my undergrad, I wasn't cracking open my biochem textbook. I was like reading Slashdot, which was obviously yesterday's Hacker News. And so when I graduated, I got a little cold feet about going straight to medical school.

2:46I had done my pre-med recs, but I felt like this tech itch needed to be scratched. So I found this random role at Google And I was like, all right, I'm going to do this. I'm going to spend a couple of years there, feel it out, and either pick tech or healthcare. It was kind of the strategy. So, I mean, but still at that time, you kind of felt like you had to choose tech or healthcare. You didn't kind of see something that did both. Well, it was kind of lucky. It was a moment where Google was dabbling in healthcare, poking, you know, at the fringes on what software could do in healthcare. And I was never involved in any of that.

3:16But the fact that that was happening led me to think, interesting, maybe there are software and technology applications in healthcare, you know, that could blend both. And so that actually left me like more comfortable in going to medical school. Yeah. So let's talk about that. So you're kind of at Google and then you decide to go to med school, walk us through that decision and you know, where you decide to go. Yeah. So I was only interested in MD, MBA programs because I wanted to do something tech meets healthcare. So I got into the program at Harvard. There weren't too many people interested in entrepreneurship.

3:47It was me and like four other people, basically. Yeah, that's really interesting. I mean, a lot of times, whether in startups or, you know, even in science, you know, the greatest opportunities are the intersection of two different disciplines. Like, was that something that you actively thought about, or is that just something that just came, you know, natural to you? No, I think it just happened. But yeah, I totally agree with the sentiment. The things that create product or services experience or value that hits at that level of 10x that's needed to really punch through, you know, tend to be in intersections, which I think they're more likely to happen now than before, which is good.

4:18So the program at Harvard, you know, they have this funny ask that as you go through it, you're supposed to take somewhat of an internship that blends business and medicine. Usually they'd set you up at a hospital, but I had known some folks at IDEO just from my time in the Valley and asked if I could do my internship there. So yeah, I mean, let's talk about, you know, IDEO, which is kind of really the start of Amada, but do you remember when you decided to apply to IDEO, what kind of like what your application looked like? Yeah, it was a crazy story. I, for no other reason than I was just interested in it, started writing for this medical technology blog, just as a side hustle while I was at Google.

4:54And they asked me to cover this conference, TEDMed, which was like the spinoff of TED that was focused on healthcare. And while covering that in the shrimp cocktail line, you know, started talking to the person in front of me. It happened to be the guy, Dennis Boyle, one of the early founders of IDEO. Fast forward when I needed the internship, and I emailed him and I didn't hear back. And like weeks later, I emailed him again and, you know, it's being pretty persistent. And then I get this random email from someone that's not him at IDEO saying, I don't know who you are, but I found your resume on the copy room floor.

5:25Like, why is a medical student interested in IDEO? I don't know why this person, Michael Moskowitz, chose to email me, but I emailed him and he emailed back. He's like, I just talked to Dennis, like we're totally interested. And yeah, the rest is history. We had a cohort of interns who we did quite a diligent selection process on and it was uh maybe less rigorous for sean that's where the sean story starts it gets kind of interesting and i can tell you the story of that if you like yeah this is a rather entertaining story because um there was a colleague amazing guy called michael moskowitz and it was one day that he came to me and he was like david you got to see this and he had literally i kid you not picked up this piece of paper from the copy room floor and it was sean's resume that had fallen off the printer somebody was doing the diligence and all the intern applications and sean's had fallen onto the floor and it caught michael's eye because it said sean had the world record for crawling and it said a bunch of other amazing stuff about sean like he got into harvard to do a joint degree and all of this kind of stuff but the thing that caught michael's eye and caused him to bring it to me was the crawling thing and i was like oh yeah he sounds like one of us already you know um that got him on our radar and then of course you know you have processes for these things and when we came out the other end of that.

6:53The crawling guy was still in the running, no pun intended. I love it. That actually happened. I don't know if you've ever heard that story before. No, I haven't heard it from him. That's awesome. Yeah. But I mean, it's one of those funny things like life is pretty random that you just dream big enough an opportunity finds you. But it's kind of one of those luck things like the resume actually just fell on the floor. It could have just stayed in the stack. And, you know, while we're on the topic, like tell us a little bit about this. Are you still in the Guinness Book of World Records for calling?

7:21No, somebody broke it about like six months after I broke that record. But I was in, I was in for a period of time. What, I mean, what motivated you? Why? It's like, just a joke. I mean, I was at Columbia to just get some extra money, worked in a lab. And I was in this like neuroendocrinology lab. And, you know, my professor who I really liked ended up getting a professor job at Berkeley. And so he left the university. And so I lost my job. And I had like so much free time. I mean, it was like 20 hours in a week. And I was just on the phone with a buddy from high school. And I was like, I should like do something with this.

7:56Maybe we should like raise money for charity or something. And Columbia had a pretty tight relationship with the Elizabeth Glazer Pediatric AIDS Foundation. And so we're like, well, let's come up with a gimmick. And we're like, maybe we like break a world record. And we're like, well, what world record would like match that foundation? We're like, oh, crawling. We're crawling so kids can crawl. You know, we didn't know how hard it would be. But the record we had to beat, I think it was like 31 miles. We did just under 33. I wouldn't recommend it to anybody. It was absolutely one of the worst physical experiences.

8:27But we got the job done, which was fun. How long did it take you? And like, what was the worst moment? Was it like mile 30? Or was there a time where you're just like, I don't think we could do this? Yeah, I mean, there were so many bad moments. It took just over 48 hours and you can't sleep. You know, the world, you have to keep one knee in contact with the ground at all points in time. And that includes, you know, a little bathroom tent. And so the worst moments, probably two. One was like, we're out there and all of a sudden we had a hailstorm. And like, we're just being pelted. Like huge hail, just like getting wrecked.

8:59And we're doing it around a track. And then we're soaking wet and freezing. So we're like shivering and shaking. This is probably mile like 25. We have a ways to go still. And then you wouldn't think this would happen, but we both got motion sick. Me especially. Oh, wow. because your head is down, it kind of screws with your orientation or perception and the, you know, the ground is moving differently in front of you. And so you just got sick. And so I'm like every lap, like throwing up, trying to get water down. I feel horrible. But I mean, at some point you're like, well, I'm so close, like I'm not going to stop, you know?

9:31And that's where, this is why like the, you know, I think in entrepreneurship, it's helpful to have a co-founder. I mean, my buddy and I were in it together, like he was feeling horrible too. And we're just like side by side, crawling next to each other. and like, let's just do this, man. And so we just kept going. So going back to IDEO, I mean, do you remember the first time that you met David Webster? Yeah, I do. So David Webster, the first time I met him, I think it was in a super senior level client meeting. I remember just feeling him bust into the room with these C-level executives, just like the Kool-Aid man.

9:59The guy is just incredibly gregarious. And it was this cool moment for me, you know, as I was developing my sense of what leadership looked like, because what I realized was like, you didn't have to put on a veneer. Like David was David with me. David was David with the person who cleaned the bathrooms on IDEO. David was David, you know, with the C-level executive. And so that really quickly gravitated to him as an incredible role model. And still to this day, he's a close friend. Do you remember the first day that you met him? I think I do because he was wearing an identical shirt to me. And I thought, oh, this kid's all right.

10:32He's got good taste. you know we're we were i mean it wasn't a particularly good taste shirt uh i remember it because it was a blue and white striped that i would put on when i had to be kind of semi-formal because i was going in front of a client and i think sean probably had the same thought process going he's just like i'll play it safe and go semi-formal because it's my first day at ideo and we were wearing the same shirt do you remember if you had any first impressions of him other than the shirt i mean there's a little mania a little spark in his eyes he gets excited about something in a in a very irresistible way it's almost innocent it's definitely not trying to be cool it's a very unfiltered hey why wouldn't we get excited about this kind of vibe and when sean came to IDEO, I had just changed role to leading our Palo Alto studio, and we had done what we could to express our creative culture in our space.

11:40It was really beautifully composed, but also not all pristine and persnickety, because we had this ethos of a creative culture being a culture of low inhibition, you know, where you feel okay about externalizing your ideas while they're still half formed and vulnerable. The only guidance that David, the founder of IDEO had was you should be able to walk up to any surface in the space with a drill in your hand and drill a hole in it and not feel any inhibition about doing that. And it makes it better. The Palo Alto office, It's kind of like anchored around the centerpiece of this enormous machine shop where like all the equipment needed to like build a rapid prototype of something, a physical object.

12:27And you had people in there at all times like making things. And the spirit of IDEO was very playful. I mean, they took like design thinking and kind of yes and orientation, you know, very seriously. You know, it was messy in a great way. So let's get to the story of like the idea, how Amada got started. So you start at IDEO. Do you remember the first time that you started talking about it? Yeah, it's funny. Like, IDEO occasionally would do these phase zero projects where they could turn into, like, you know, points of view for the world, occasionally businesses. It was very rare, but they wanted to do one in healthcare.

12:59And so the question was, like, well, how might one build a more evidence-based digital health company? What are the care areas where digital really mattered? Like, what are the care areas where, like, the existing system is, like, actually broken, where fundamentally a different design experience was needed? They knew I had an entrepreneurial bend. So they were like, oh, well, maybe, Sean, hey, how about you look at this brief? Was it a paper brief that you read? Did someone email you a document? Yeah, it was someone emailed me a document. And I remember I just wrote a ton of feedback on the brief and just wrote a bunch of red lines back on suggestions if IDEO were to pursue this.

13:33And they were like, that was incredible feedback. Like, actually, we think you and Adrian should run this thing. You know, Adrian, who ran medical products. You know, the cool thing about IDEO was we're working across all these different sectors and it seems like there's an opportunity here at the sort of system level to figure out how to do something when you still can. and we didn't know what it was going to be so what we're going to do is we're going to set up a project we'll give it three months and we'll put two of our hot shots on it and we'll see what they come up with and we put sean and adrian on it sean being this person that we had very quickly realized was someone who can hang and is really extraordinary on the creative heart and soul side and is really extraordinary on the pragmatic clarity business get it done move it forward side and adrian james being this amazing engineer prototyper builder you would have put Adrian in any team.

14:46He was just like this, easy to get along with the type. And we put those two together and said, yeah, let's see what you come up with. And so it was great. I mean, they carved out the time and budget for me and Adrian to like really think about what was wrong in medical care, you know, what the business opportunities could look like. I just started to look at the epidemiology, just digging deep into a clinical area and realizing that the deeper you dig, it was like, I was like, this is bad news. And you look at like where we had come as the contrary, relative to obesity, metabolic disease, diabetes, hypertension, you know, all the subsequent conditions, you know, we're looking at that and we're like, this is bad.

15:21It feels like it wasn't even getting the attention it needed. Now we have like 156 million Americans with chronic disease and, you know, very few of them are getting the sort of care that like has any chance to actually help their health. And then you look at like, well, what can fix it? You know, we interviewed patients, we sat in the homes of, you know, people in Georgia and, you know and the bay area that had pre-diabetes obesity and you know diabetes and asked them well what was offered to you and these individuals all had primary care and it was like it was so obvious they weren't getting care i mean it was like they got a pamphlet and a prescription and then asked to come back in six months and like it wasn't working for them we had a lot of people who had a lot of insight into different components of the diabetes experience and they use that to characterize this opportunity that starts with the conversation with the doctor you're pre-diabetic you need to change your lifestyle see you next year and they're like now i think we can probably do better than see you next year and so it was so obvious that the like model of the existing system actually unfortunately would never meet the need it was obvious that the like the laws of physics of how both the current operations and the finances of our healthcare system is structured just do not fit what is needed for these care areas.

16:46And so realizing that the trajectory that the country was on and the globe, frankly, was so horrible that like, if you didn't start now, it's like you didn't have any hope. That like just fired Adrian and I up. And it was clear that there was something in the water with digital health, but equally clear that like there needed to be a little bit more refinement. You had these just remarkably different worlds of technology and healthcare. So the worlds were two separate. That was a moment in digital health where like step trackers were all the rage. And I'd be with my tech friends and like, oh my gosh, these are going to change healthcare.

17:15And then my medical school classmates were like, well, what are the clinical areas? You know, where's the evidence? What are the endpoints? What are the trials? I mean, you didn't have like VCs that would do healthcare and technology at that point in time. So, you know, that felt like that was doing a disservice to really what society could use. So it was during that internship, you went into people's homes and sat with them and talked. Do you remember, was there any like one or two people that really stood out? Oh, yeah. I mean, there was this one woman where we're like showing her the prototype.

17:42And at the end, she was just imploring us to build it. She was like, you have to build this. Like, go build this. Please build this. It needs to exist. And we're like, yes, ma 'am. We're going to go build it for you. Do you remember how long it took? Was it like, oh, you probably had that feedback. You go through a cycle of talking about it. Was it like a couple of days? Was it a couple of weeks? Like how long did it take you to kind of refine that initial idea into what eventually became Amada? I mean, it was a couple of months, I think two to three months. After kind of three months, we knew we wanted to swing for it.

18:16Was there a first time when you sort of said, okay, we really need to like move ahead with this? You know, I think it was on those like trips visiting people's homes. Because that's where you're like, we're not doing it for us. It's like, this is for like all these people where it was just so obvious. You felt like how the heck, like healthcare is fooling itself. Like the observer from the side would look at those people we interviewed and said, oh, they're under care. They have a primary care doc. They've got a prescription for medicines. They're under care. They're under great care for their diabetes.

18:44You sit in their homes and you're like, they're not going to get healthier. Like there's zero chance. Without like active support, they felt totally lost. And so that I think was the moment. It was like leaving those trips. It was like, let's do it. Can you give us kind of just a quick description of what that initial product was? Yeah. Yeah, so I mean, fundamentally, we're a between-visit care provider. And so the evidence was clearly there that with the right longitudinal day-to-day support, you could help people differently with metabolic disease. The goal is to create a different type of care for those 156 million Americans with chronic diseases.

19:20Care areas we're in are prediabetes, obesity, diabetes, hypertension, musculoskeletal care. And then the way we deliver care is pretty common across those. First, we set people up with hard work that's needed. So we've got like a cellular connected scale, a blood pressure cuff, a glucometer, continuous glucose meter. So we get your hardware. Then we introduce you to your care team. It's folks like certified diabetes care and education specialists, you know, health coaches, physical therapists. Then, you know, everything is tied together with a software experience that's done with our mobile app.

19:47And so there's goal setting, there's content, there's community, there's tracking. Like we built all the pieces, you know, recognizing that like you couldn't just do the great content or just do the great food tracking experience and have it work. you kind of needed to have it all. So going back to IDEO, I mean, you know, you expected that point for it to be what, a three or four month internship. And did you ever feel any pressure? Like we got to get this done quickly or, you know, did you just fully expect to go back to school? You know, I think actually at that point I had already asked for a year off because I was just having so much fun over the summer.

20:18I knew I wanted to at least spend one more year at IDEO. And then the project, I believe started January 2011. And so I think at that point I was like, had that look, I need even more time off from med school conversation with the faculty. And they were like, okay. And we incorporated on April, I think April 24th, 2011. So I was probably just about to come up on that. You need to come back moment when we spend the company out. So you kind of had both those things converging at the same time, right? You're like, Hey, I could go back to school. I could start the company, like talk us through that decision.

20:51That seems like a little bit harrowing. Well, it's funny, looking back, I don't view it as a decision, strangely. Like, you know, sometimes I go, you're so bold, you like dropped out of school. I'm like, no, no, no, it gives me way too much credit. I just like slowly phased out. It didn't feel like a choice, really. I was like, well, obviously, I'm going to keep working on this. You know, I mean, you've lived it in your personal experience, I'm sure with Weebly. And it's like, you just get started on something and you're like pulled to it and you like just fall in love with the problem and you're like you can't stop so it wasn't it didn't even feel like a choice which is probably honestly the right thing for sean it didn't seem like a hard decision he didn't seem tortured by it by the time he made that decision he had absolute conviction that the opportunity that they had glimpsed with this early investigation into amada he's like well this is my life's work why would I go back to school?

21:41I found it. Let's go. And so that was his attitude. When did that kind of feeling come along and when did it click? Well, I think the right orientation in building out any business should be to feel that it's going to be your life's work because it's so hard. I mean, fighting gravity is hard in any sector. It's especially hard in healthcare. I mean, healthcare is like the double black diamond of enterprise entrepreneurship. And it kind of felt like we saw things that people weren't saying, Like you talk to the clinical side and they all these ideas on how to improve diabetes, but they had like zero fluency on product and tech and experiences and connected hardware and like serve different services models.

22:18And then the tech side, I'd hear some of the language in entrepreneurs that were like not medical school literate, but like we're trying to start tech companies focused on healthcare. I'm like, shoot, that individual could not have a credible conversation with the chief medical officer. so it was one of those things where it's like you know it was a good what I say like founder fit relative to the founder business fit it was I was like well this is great because like I can speak both languages like I know how to credibly hire incredible engineers and designers like I know the right words to use to ensure that their skill sets feel appreciated like I can have those conversations with the medical leaders because I know how to read a clinical trial and I had enough medical exposure to like understand like the mental models in healthcare and how it worked and that didn't work And, you know, and I was like, well, this is like a unique thing where it's like, if I don't do it, who does it?

23:06And that's how me and Adrian started to feel. We're like, well, whatever, let's just like swing at this. And you abstract yourself from it. You're like, would you want like a company or some people just giving everything possible to this idea? And the answer was an obvious yes. And you're like, well, it may as well be us. And like, I do occasionally get the med student emailing me, be like, should I drop out of med school? And the best answer is what obviously Mark Contreras always says. like, no, you shouldn't, you should stay. Because like, if they really should be dropping out, they like will do it anyway, regardless of the advice.

23:35Like before kind of moving on, I just want to take a second to reflect on that too. Because like you said, you get a lot of emails from founders, they're really torn up about is this the right idea, you know, where I want to start a company, and I'm trying to think of an idea, you know, in some ways, this was a bit different in the sense that you kind of started as an internship, this idea kind of grew from that. How do you think about how good ideas come along? Is there a process that's usually better? or is it more just about, you know, being receptive to the right idea when it comes along and being prepared for that?

24:06I mean, I think ideas take a ton of work. Sometimes people are like, well, if you ever founded something new, like, what would you do? What would be your idea? Like, I don't know. It would take me like literally like months of work to find the idea. And like the work is literally going down the pathway, like in so many different vectors on like a problem set. That's like, you find like the problem and then you like literally have to like find, especially in healthcare, like go through every single stakeholder. Like, how would this fit into the world of a physician? How would this fit to like a self-insured employer, full-insured plan?

24:34Like, it takes a lot of time. We were kind of given that at IDEO. We had literally three months to do that. And we went in so many different directions and that led to the conviction. And I think like, that's kind of the process. Like, it's a fool's errand to think that like, oh my gosh, I was dreaming and aha. Because most of those will have already been thought of. In fact, most ideas have already been thought of, but it's the uniqueness of the details on why it's a different take this time around relative to where the market's at, et cetera, et cetera, that can make it happen. So it's, yeah, I guess the misconception that I sometimes feel is like ideas take real work, real work to get there.