[Music] today on the podcast we have Ali parer founder of two Health businesses that have reached unicorn status Babylon health and circle Health Ali was born in Iran but left when he was 16 in the aftermath of the Iranian Revolution amazingly he taught himself UK high
school and went on to study at the University College London Ali sold a media company he started during University and then joined the investment banking World 20 years ago he set up Circle Health the first private company to run a UK NHS Hospital which
became Europe's largest Partnership of clinicians with around2 200 million of annual revenue and 3,000 employees Circle Health was taken public in 2012 and Ali stepped down as CEO then in 2014 Ali founded Babylon Health a health service provider that
enabled users to have virtual consultations with via the app at its height Babylon was a unicorn with a huge amount of Revenue and Ali LED babylon's listing on the New York Stock Exchange with Ali calling the decision to go public through a spa an
unbelievable unmitigated disaster now Ali is bringing a lifetime of lessons from right at the top of American and British Healthcare to his next company codia an allinone AI health assistant in this episode we talk about how AI can transform health healthare
the lessons from failure what Ali learned from Babylon health and what the perfect age is to build a startup Ally I've been looking forward to this one you and I have had some brilliant conversations over the years about how
AI is going to completely transform the very broken way we receive Healthcare the whole purpose of this show of giant ideas is to bring those conversations that we're privileged to have at giant house with people like you to our listeners I've Loved going on the
Journey of Discovery with you as you've planned your next ACT in health that aiming phase I think is super critical for entrepreneurs before they actually start the company you've now launched tell us about the new business when we wanted to start again
Tommy I called many people I knew at the leadership of Health Care in various countries with a question that what is the biggest problem that is facing you right now and in VAR ably the answers always almost almost always came to the
same thing Workforce having enough people and when you think about this you kind of think how could it be that in countries as white A Part as Thailand Singapore China United States United Kingdom afri various countries in Africa uh Northern countries we have the same
issue that cannot be incidental must be be structural and if you think about the structural problem in here is that we have an inherent imbalance in healthcare between elastic demand you and I if anything goes wrong with our loved ones
we will spend or want to spend as much money as we can and as much time and effort as we can to solve that problem versus a very um constrained Supply and that problem is structural and what AI gives us now for the first time is the promise to be able to match an elastic
demand with an elastic Supply and if we can do that we will solve the most fundamental problem that makes helker inaccessible in aordable to the vast majority of the people on Earth amazing and how does that translate into the company quadrivia what will quadrivia do
initially and then what's the Grand Vision if we can create an AI assistant a comprehensive controllable um and uh and uh manageable trainable AI assistant customizable that we can put in the hands of every clinician to serve their patients that
that can do all the bits of the health care that they uh can get assistance with that should significantly improve the productivity the ability to reach the scalability of the clinical Workforce we already have in the world so what we're trying to
build is exactly that a comprehensive not a AI agent that solves one single administrative problem but one that can comprehensively uh try to help you with your administrative and your clinical uh issues one that is controllable one that is trainable that you can customize it
the way you want to healthare is delivered in many different ways in many different countries and our aim is to put an assistant in your hand that you can build a relationship with that could be as eventually can become your partner
in delivery of healthcare and I think as AI is getting better today AI can do some tasks it can do some processes but it cannot do a job but AI is getting better every day and it's getting better not just because our algorithms and our models are getting better it's getting
better because the underly power behind it and we can talk about that uh is becoming much stronger every year what can AI not do today in health look uh if my child is ill AI is not going to put its hand on the child shoulder and say trust me I'm going to
make you better I am not going to I'm going to trust AI to do simpl stuff but super complex stuff I don't think so we've noticed here and I think all of our listeners and Watchers will have noticed just the extraordinary pace of change with AI over the last 3 6 12
months if you think about you know for listeners moving from Google search to chat gbt or perplexity and then the new versions of those products and just the step changes every time release a new version quality and power of AI is is
changing very very quickly maybe for for listeners just to help understand you know in one year's time what will AI be able to do in healthcare that is transformative to even today and then when we think ahead to kind of five or 10 years time where does it go there
because this stuff is moving at incredible pace so Tommy I was born in the Middle East and in Middle East we say if you want God to laugh you give her your two-year plan so I have absolutely no idea where how this is going to go because there's so many factors that can
define a future availability of power processing politics regulations you name it and what does all of this mean for for listeners so is this about making the journey through a fairly broken Health Care system in whichever country
you happen to live in a little bit less painful or is this going to lead to significantly longer lives healthier lives happier lives I think this will lead to almost if if implemented correctly and delivered as planned and as we both know
life can come and give us a lot of things that we never expected my personal life is full of things that I never expect uh so uh but uh but assuming that we can overcome those challenges uh this should provide constant near free availability of health care services to
everyone everywhere in the same way that we have near free availability of information to everyone everywhere uh today I think that's what it will do Tommy I think to your next question which was what is it going to do to our life does it going to make our lives
longer I think that whatever technology is doing today it's almost going to be eaten for Break by for breakfast by what is happening in the world of biology if you just look at what is happening in that world that fundamentally can change our expectation of healthy life and the
way we've grown out look we today we have created a worm that can live 10 times longer we have stopped the aging process in a tomato we have even reversed the aging process in a mice uh what is happening in the world of biology I think will have a very
different set of effects on the way we will experience life and Longevity but AI will also make a contribution is accelerating biological uh development I think when you put all of that together Tommy the future is incredibly compelling very exciting we just need to
make sure that we use all these forces that we are unleashing for good I completely agree and you know in our practice at Giant we've been investing yes in healthcare AI companies but also in what we think of as the century of biology which is a phrase we borrowed
from one of our portfolio Founders Edward shenderovich who founded synonym which is aiming to completely transition the world of manufacturing away from hydrocarbon based manufacturing to using plants to using biology to manufacture
everything from Cosmetics to food to enormous array of products and services around the world so I'm I'm with you there Ali shifting gear a bit there are very few people who have worked right at the top of both the UK Healthcare System
and the US Healthcare System the UK healthc care system is broken that is the words of West streeting the new health secretary his initial statement was my policy is the NHS is broken the US is riddled with an enormous amount of perverse incentives with insurance
companies what's your diagnosis and if you were running those systems what would you be doing to try to fix them I think the Health Care system not just in us and United Kingdom but I think it's globally broken and it's globally broken because of this
fundamental imbalance between the demand and Supply if you put that imbalance in any other sector you will have the same broken results because once you have enormous uncontrolled uh elastic demand and only so much Supply you have to somehow
distribute that Supply you either ration it and therefore make sure almost everybody doesn't get enough or you just give it to whoever can pay most or one way or another you have to figure out you have to distribute that constrained uh Supply among the
uh uh elastic demand I think if you can solve for the uh constraint of supply and make the supply as elastic as the demand is I think that will change the that will change the fundamental uh inequality in healthcare in my own lifetime Tommy that has
happened on information right I had to go to a university to do a PhD to uh uh have access to the library of that University uh to learn from those uh amazing lecturers and professors who took me and mentored me but today we almost have accessibility to information
near for free thanks to Google and other uh information technology companies uh for everyone everywhere uh a professor at Stanford was telling me that one of his best students was a teenage girl from Pakistan who just joined one of his Muk um uh classes and did so
fantastically well she came top of the class and is now studying with him back in Stanford that kind of democratic availability of educa of um information I think is what is going to happen in healthcare uh it's not here now it won't
be here tomorrow but that is something we need to work for in order to get it let's talk about Babylon in your own words it was an enormously powerful product it created you know huge amounts of benefit to patients and it created a lot of Revenue why did It ultimately
fail so I think look there was a two answers to this the simple answer and the both of these answers are true the simple answer is we had a series of Highly Unfortunate Events we made a decision to take the company public uh that was probably too immature we made
the decision to take a public through a spack uh which was the rage at the time that was clearly wrong because every Spa company uh that especially of our cohort that came at the time we did fail we got unlucky that it came out in October 21 and the market fell apart in
September beginning of October 21 so we were left with $350 million that were supposed to be uh we were supposed to receive and that money didn't arrive and once it didn't arrive we became public with a huge gap in our balance sheet for
everybody to see all the spa companies are being shorted by the hedge fund community and every one of them almost collapsed and we were no different than anyone else the fundamentals of the company was super strong we were still growing at 400% a year we were uh reducing our
losses significantly we were actually by the time the company sadly collapsed we were only 5060 million away from uh profitability so that's and then we made a series of wrong uh decisions at the time our shareholders Sly didn't have
money to give and cover that Gap because they were having their own challenges all the whole Market was falling apart our debt holders to thought that they could take advantage of the situation and own the company but they just couldn't they wanted to merge it with
another company they had that wasn't doing very well and that didn't work out for them it just wasn't their area of competence so a series of bad decisions clearly from all of us but also A Series of Unfortunate Events I don't think by any stretch of imagination was inevitable I
just think it was what happened happened but that's that's if you want is a simple simplified answer to this bad luck so on and so forth R Dalia who was on on your show just just before me I I think in one of his principles in his great book is that
adversity together with reflection and learning is what creates progress so as you can imagine when Babylon failed um and as as somebody who uh is a fail scientist I always wanted to B one or that's where I my training is I spend
a lot of time thinking about what were the fundamental reasons behind that how did we even allow that bad luck to affect us uh the way it h it did and and the learnings I took away from that Tommy are are manifolds but I just list some for you we used to say in Babylon
uh dream big build fast be brilliant and I think all of those were absolutely true but in all implementation of all of those we made mistakes and I don't think that's unique to us I think if you look at any single company they would have made one
or other one of those mistakes so I think it's super important to take a very big market and try to solve a very big problem but in doing so I think it's also very important to stay very focused within your resources on what you can and cannot do we were growing at 400% a
year every single year in Babylon the demand for the product we were delivering was almost unlimited people loved it our customers loved it we never almost lost a single customer ever and they were all growing so we went in 2018
from um uh uh five million of Revenue to 209 20 million 2021 80 million 22 320 million 23 1.1 billion and by the time we almost collapsed we were running at1 and a half billion dollar of reeven right but um but I think that we should have stayed more focused and curtail
that uh growth not thinking or believing what we were being told that finances will always be available to fuel that grow the second lesson I learned is that you know we say uh uh build fast that is super important and you remember Reed
Hoffman wrote the book Blitz scaling which was like you just put anybody anywhere just build fast because once you got the market share you can fix all the problems I think that is important because life is short but I think the other principle we had which is be
brilliant is a balancing count to that so we you should never compromise on the quality of your product on the quality of your people on your team we were super lucky to have brilliant people in Babylon but you know like Reed Hoffman in his book talks about when you're
growing really fast just put any bumb on any seat and while we didn't do that maybe sometimes we should have slowed our growth a bit make sure that we check on every piece of our product a little bit more carefully because as you build a product if you
make it go wrong in one place it'll slow you down later so this technical debt that gets created and then uh being brilliant also means keeping control for your mission for your vision for what you're going to do needing the money
that we needed meant that we lost control of the company like me and my employees one of the greatest successes of Babylon was that we collectively having raised over a billion dollar of money we still owned near 50% of the company uh and and just think about how
rare that is today and we uh managed to do that partly because we are in a massive sector Healthcare where a billion dollars seems like a lot of money to us but all of our competitors had raised hugely more like um Oak Street Health who went public just a
little bit ahead of us well we could rais that 300 million they raised and their shareholders gave them over three and a half billion dollar of money in that very same period like a good friend of mine who used to run parts of United Health used to tell me that this is a
trillion dollars of uh uh industry and you guys are investing in tens of millions hundreds of millions while at United we are putting 20 30 billion to work every year just in Acquisitions right so so I think those are the things we learned but fundamentally then it
comes down to the financials of a company and I think what I learned and I will never do again is you have to keep the thing that you are above everything else in control of is your expenses so we you should keep your costs always
down and never believe that the money always going to be there you should have a business model that continuously is leverageable from revenue from operations leverageable and uh cash flow leverageable and fundamentally and finally you need to figure out your cash
engine before anything else uh but each of those Tommy are a very large and long conversation that you and I can have at another occasion but I learned a lot and I am grateful for the learning but super sad for what we lost because I think we lost an incredibly valuable
company Al you mentioned control there and for me when I look at entrepreneurship and the vast array of entrepreneurs we work with giant there's really two characteristics that stick out to me of the really great ones one is persistence Obsession that type of
thing and the second is control and it's something that Alex Ferguson the great football manager talks a lot about in his definition of his success was always always retaining control that can have many different shapes and forms for you
obviously one element there was the nature of your relationship with investors and debt holders Equity holders has that experience changed the way that you think about venture capital and when you're going to be building Cadia will you do it differently will
you change the way that you take money from from VCS it wasn't incidental that we lost Babylon within six months of me losing control of the company if you look at the decisions that was made at our board at the short termism versus the long-termism the
sticking to the uh things that would have been right for the company versus the needs of the other people at the time and by the way none of those people made the wrong decision for them in in a world in which you all have to do what
you have to do in order to survive to do better like I think that our Deb holders were instrumental in the way the thing ended up but they didn't make the wrong decisions for them they had another company that was in trouble they thought that they can take advantage of their
position in the cap table to merge these two together and then solve two problems at one and then as the markets recover they both do really well and they do well that was a perfectly rational correcting for them to do and the right decision for their stakeholders and
their fiary duty but it just wasn't the right thing for the company for another set of stakeholders and another mission and that's why I think control matters because it matters because it allows you helps you to stay true to your vision
and to your Mission uh whether that comes in voting rights or in having common shareholders with the common set of beliefs that don't have a conflict of interest it doesn't matter but you need to make sure everybody's aligned for the
cause for which you started the whole mission Al you tend to build as a soul founder rather than as part of a team of co-founders why have you made that choice with the businesses that you've started first of all I never started thinking I want to be a soul founder or
co-founder or it just that I think very deeply and very long about a problem before I started and as you do those thinking you go through a journey and once you get to a destination where you become completely convinced that this is now
something I need to invest my life on because For You Tommy when you invest in something you have collected other people's money and then distribute it say about 20 30 50 companies doesn't matter but you are hedging your bets for me as an entrepreneur I am putting all
of my life all of my family's future all of the time I have which I have not that much left in the world into that one single thing so I need to be super convinced and have worked really hard at getting there by which time you're
mentally in a place that it's very hard to bring somebody else along uh uh to so I think you will find many many entrepreneurs who once they get conviction Elon musque is one jobs which once they get conviction they're really going there by the way I know this OB uh
the VC Community really likes co-founders and I can see it from their point of view because they're hedging their bets they're creating teams but I also have seen far far too many of these teams where the conflict between those co- Founders eventually became one of
the weakest links inside an organization for sure and I far too many companies implode utterly unnecessarily just because of personal drama I'm not a dramatic person so uh and uh um and therefore I find it easier to align a team for sure we I think
you're totally right and I think it's one of the biggest reasons startups fail is co-founder breakup AB absolutely no doubt about that why do you guys focus on that so much it's really interesting to me everywhere now because I get a lot
of entrepreneurs coming to me talking about building companies often that raising money and they always tell me well one of the things we are first told is that go find yourself three co-founders or do this or do I mean it's unbelievable like you're putting a bunch
of people who hardly know each other into a group just because they fit in that moment and expect to make very big decisions in a very long period of time in sync with each other on a subject that matters entirely on their livelihood I mean structurally that's
never going to happen I totally agree and you know there are a number of accelerators who shall remain nameless whose sole reason of being is to mash together co-founders who literally have never met get people to meet and within a month go start companies together and
to me that just seems like a recipe for disaster because how are you going to go on a 10-year Journey with someone you met a month ago so I for me I always look and go if there's an amazing team which have worked together before or
know each other deeply that's pretty powerful because you're can have different strengths and weaknesses but meeting someone and then going starting a company together does not seem like a recipe for success to me uh at all um by the way in quadia our biggest strength
is exactly what you said is that we have brought together an incredible team of Highly experienced uh people who've been we've been together for years trying to solve this problem and even though one of our costumes has failed the bodies and the
brain is the same going into a new costume I don't see these companies as separate U while they're separate entities they all follow the same mission to bring to life our belief that hellare is accessible and affordable for everybody and should be and could be I
love that I I absolutely love that the other thing that I think really resonates is the time that you've spent thinking about what this company is going to be and as I mentioned at the start that aiming phase I think is underutilized by a lot of entrepreneurs
because you're going to be doing this for 10 15 years at least and you know as an entrepreneur if you're not really thinking deeply for three six months about what you're going to be doing for the next decade it just doesn't make sense to me so I think people go off in
different directions and wrong directions because they haven't spent the time up front in that aiming phase so and it's it's been a privilege to to watch you go through that aiming phase with this business but let me ask you Ally you know you've now built two
Healthcare companies which have at some point been worth over a billion dollars created huge amounts of Revenue you sold your first company I believe aged around 30 you're now starting this one at almost 60 I wrote this article for Fast
Company a while back on the of experience in entrepreneurs and this fallacy of The College Dropout as the perfect archetype of entrepreneur and if you look at it the average age of Founders behind America's fastest growing startups I think it's some
somewhere around 45 if you look at unicorns a lot of unicorns I think the average age of like starting them is mid-30s even 40s and then if you look at people right at the top of the game in the technology industry who are really driving a lot of the change it's not
youngsters right it's people like like Jensen at Nvidia it's my old CEO at Microsoft Sati Adella it's Sundar at Google and these guys are you know 50s in some cases 60s how do you think about that is that a positive in your mind you know I I actually think that almost in no
other area in our life we will say that we're going to back somebody with no experience and would you go to a doctor with no experience and say do surgery on my brain uh would you go to a scientist with no experience right that doesn't mean that
the genius with no experience who has solved an incredible equation or has figured an incredible research is any less valuable I I just think that the question is about what value can you offer and there are people who can who
have come across great ideas great scientific discoveries very early on in life that they can offer that and do incredibly well with it but for most of us mere mortals we need to gain that knowledge through experience we need to just kind of work at it make our
mistakes do better for me age almost has nothing to do with it apart from the fact that the ordered you are the more experience you gain against that goes the challenges of Aging the cognitive decline the slowness of uh uh energy so when I want to start a new company I
don't look at how old I am I look at how fit I am I can still swim five to seven eight kilometers I can still do a lot of things that I could have done when I was younger I still feel that I'm as sharp as passionate as I used to be and then
the calculation for me is will I be here in 10 years time do I think that I have what it takes for the next 10 15 20 years because that's what it takes to build a company of real substance uh to be there my assessment is that most of the people of our generation are
going to do really well even without all the discoveries in longevity well into their 70s but uh I think there is a long I think we have a long way to go Ali just before we end I want to go back to Babylon just because you've been on the receiving end of some
pretty intense British media coverage you're not the only giant ideas podcast guest who's had that type of intense coverage it's a bit of an issue we have in the UK with our media what's the one thing you want to set the record straight on about you or
Babylon I don't know I think Tommy when I read all the stuff that has been written about Babylon so much of it is just pure Fiction it's just it blows my mind how people can write what they write with so little knowledge so we were ask not to
do any interviews and we decided not to one of the biggest successes of Babylon was because everything we did was done so well and so properly that when a company of5 billion dollar public market value at its peak uh went uh into Administration we didn't have a single
lawsuit think about this in United States and that's because nobody could find anything that we did wrong and then these journalists who were not lawyers who didn't have access to the documents didn't have access to us like we talk to some anet
some employee that only lasted with us six months went then somewhere else and lasted only there six months three four months uh and then come up with some fantasy and they make that the foundation of their story that the Babylon AI didn't work or was a spreadsh
I mean some of the things you read you just think that don't these people do research I must say most highly experienced old the journalists that talk to us decided not to write because they said look we can't if we can't get all sight of the story we may end up
being embarrassed in future it was often the younger ones who were after the after a name who did but you know anything you do that is public you take the good and the bad I'm sad that and you're right about Britain because that only came in the UK press it was very
very rare in the US press even though 95% of our business was in the us but as as things went wrong I got a call from a friend of mine who's built a massive company household name everybody uh will know but I hold the name and he said to
me Ali what's going to happen now is you're going to get a huge amount of criticisms and public uh thing I'll bet you that you'll get it from people who have not achieved much and not from those who've done more than you and it was so true it is never the
great coach like Alec Ferguson who watches a football team and says Ah these people don't know what they're doing it's always the guy on the couch who's never played football who thinks that the rest don't know life is really hard it's complicated sometimes you do
well sometimes you do bad sometimes you get lucky sometimes you get unlucky um um I was not very impressed by the people who uh sometimes incredibly unkindly did what they did and said what they said and I was equally super impressed by the vast majority of people who gave us so
much support yourself included so much kindness and uh allowed us to keep our belief going and that is always the majority those people with negativity are always the minority shame that they are a minority and we should not allow them to uh uh
darken our view of how wonderful humanity is well I'm incredibly proud of you that you've got back up and you're going to go again and do this all over again which is not the easy option the easy option would have been to say okay I've done enough I've
I've tried enough times to do this stuff in in health so it's awesome that you're doing it Ally we'll end with a question we ask every guest on giant ideas what is it about being alip Passa that has made your extraordinary achievements
possible I think I got very lucky at the moment in life that I thought I got the most unlucky I was born in a very well to-do wonderful loving um M uh middle class family and then they revolution in my country happened and I was forced to
leave at the age of 15 16 entirely on my own Come Away build a new life experience the kind of poverty loneliness um chaos that I wish on no one but it was that extreme difficulty that helped me uh learn how never to give up on a defeat how it's very easy to overcome big
problem and whatever that is a huge issue shall eventually pass and you will get to the other side of it I think that's what made me and most of the other people that I know that are resilient who they are and I wish it on everybody I wish it
on my children I think that we often H the more we create a society in which we solve other people's problem and don't let them especially when they're younger to face what uh is called desirable difficulties the harder it gets for them later in life so
I'm grateful for the difficulties I had in life but I'm generally what makes me is I'm generally super grateful for just being alive for watching that incredible world that we are all building together for the potentials and possibilities
that are in front of all of us we are virtually together with Biology and Technology with science we virtually changing what it is to be human what's the definition of a human Sapient and how lucky are you and I to live and witness it and hopefully be able to
contribute to it a little it's a lovely way to end and we'll have you back on in 10 years when this giant idea has taken Bloom and has hopefully transformed the way we all receive Healthcare around the world Ali thank you so much for sharing your giant idea with us today thank you
Tom thanks for listening if you enjoyed the episode please please do share it with a friend and you can listen back to other episodes we've recorded with people like Ray diio Ariana Huffington and the founder of Deep Mind Mustafa sullon [Music]