Beth Houck Transcript
Clint Betts
Beth, thank you so much for coming on the show. You are the CEO of SonarMD, which I was telling you before we hopped on here I've been reading a lot about, and I'm actually really impressed with what you're building. But tell me how did you become the CEO of SonarMD? Tell us about yourself, and give us your background.
Beth Houck
Thanks. So, actually, I am a first-time CEO. I have been in the healthcare industry for most of my career. I got the opportunity to do a startup; I hate using time when you get older. It's like... say, 15 years ago, I got the opportunity to be the number two at a startup, which then launched me into being the number two at another startup. And then and behold, I come to Sonar, and guess what? I'm the number two again. And I do recall there was an executive coach, maybe again about 15 years ago, and she says, "When are you going to stop being the number two?" And I guess the answer is finally in 2021.
So I became the CEO in 2021, our original CEO, so I joined Sonar in 2019 to basically get Sonar off the ground. So we had a physician founder who had built a really, really great product and story, but it needed to be commercialized. And that's part of what I do, which is figuring out how to get something into more of a business, make it less of a project, and more into a business. So, I got hired as the number two person to help with that. Our CEO decided that he wanted to go back to private equity, which is where he had been working prior to that, and I got the opportunity to step into his shoes. So it's been fun. It's been fun. So I'm about three years old, and I am in the position.
Clint Betts
That's incredible. What has that transition been like from being... I met you as COO before; what has that transition been like going from that to CEO? What's the difference between those two roles?
Beth Houck
It's a great question. These are small startup companies, so you find yourself doing a lot of things. And to be honest, I think I thought that it was going to be... there's a cache that comes with having that title, and I thought that maybe it was a bigger thing than what I was ready for. And I hear that that's common with women, actually, that they're reluctant CEOs because they want to make sure they know how to do it first before they do it.
And somebody said to me, "You know it's just a different job, right?" And there was something about that comment that just took a lot of the air out of my head in a good way, and they're right. So it's been fun because, at this point in my career, I don't know that I've necessarily when I'm the COO of a startup, I'm doing a lot of things that I have done before, maybe differently, but I'm still doing the same things. I get to do new things. I get to do things that I haven't done before. So, for me, it's been a great transition.
Clint Betts
Tell us what SonarMD does.
Beth Houck
Okay, so SonarMD, we manage patients with inflammatory bowel disease. So, that category is Crohn's and ulcerative colitis. So those are people with really tough chronic conditions that are really expensive. We help do that as an extension of those patients' existing physicians. So we're not, "Hey, call us on the phone," or "Digital first download this app," kind of thing. We work on behalf of the physician practices, but what we're doing is we're taking care of somebody between the visits. So if you're a patient that has a chronic disease, you tend to normalize your symptoms. And so you have your doctor visit a couple of months go by and you are like, "Should I call him? Should I not call him? I'm not sure if this is weird or if this is different or I always feel bad." And we're that guardian angel. So we're the thing in between the visits that help to calibrate that.
We use a lot of data analytics to do that. So we collect patient reported outcome data and we use that to predict whether or not those symptoms for that person are indeed something that need to be seen a little bit more with an in-person visit. But we also provide a lot of wraparound services too. So you're in between visits, you're not feeling great, but maybe things aren't terrible. We have a lot of holistic health services that can help support those patients as well.
Clint Betts
Who saw this opportunity? This is fascinating. This is the part that I was like, "Wow, this is really cool." And IBD a lot of people suffer from that, probably more than people think.
Beth Houck
And it's tough, it is a tough disease. There's no cure for IBD. So you have it and it's all about managing it and it's about... I'm not a physician, but clinically if you can manage it for longer, you are reducing inflammation and you're keeping that disease progression at bay. So, while you're not curing it, keeping the disease progression at bay means that you're not having consequences from the disease that are worse for your quality of life.
So, I have to give all the credit to Dr. Larry Kaczynski, our physician founder. So it's him who came up with the idea, and he likes to tell the story. He would see his patients, and he had great relationships with them. And he said, "I gave him my cell phone number and they wouldn't call me. They wouldn't call me. And I'd see that they ended up in the emergency room. And I'm like, "Why are you in the emergency room? Why did you call me?" And they said, "Well, Doctor, I didn't really know that it was a problem." He had this little aha moment, and he says he was watching The Hunt for Red October, so he decided that he needed a ping system. So he had the whole submarine ping thing going on in his head. So he's like, "I need a ping system. I need a system that pings people between visits so they can figure out what's going on." So he is a very entrepreneurial guy. He spun one up. He got some outside tech people to spin something up so that he could ping his patients between visits, capture patient-reported outcomes, and calculate information about them to determine whether or not they were deteriorating.
He is a charming person as well. So he went to Blue Cross of Illinois, and he said, "Hey, I've got this idea, and I'm working on something. How about you give me some data so that I can see whether or not it's working?" Got that as well. He was able to prove for about 220 patients in his practice that he could reduce their emergency room visits and their inpatient stays significantly, over 50%, and reduce the total cost of care for those patients by $6,500, which is about 15% of the total cost of care for a patient.
So a plan, a Blue Cross of Illinois was very intrigued by what he was doing. So that's really what launched SonarMD was this study and this work that he did to prove that his hunch was right.
Clint Betts
So, what does a typical day look like for you now?
Beth Houck
I thought of that question in general, and I wonder if people answer it this way for you a lot, which is there is no typical day, but working in a startup and working with a smaller team and/or a team that's matrixed or we have a lot of contract people that we use for different expertise, means you have to kind of reset your day on a daily basis. You have to think, "Okay, what's the most important thing today?" Because it might not be the same thing as the most important thing tomorrow.
I also spend a lot of time calibrating and making sure that everybody is working on the right things because scarce resources mean you're not going to be able to work on everything. So you have to make sure you're working on the right things. So, my typical day is a lot of check-ins with various people. Obviously, my direct team and I spend a lot of time on sales, so I spend a lot of time with my salesperson, but I also contribute to the sales process because that's really important. Right now, my typical day also includes working a little bit with my board and investors because we're in the process of raising a little bit of money to further our mission.
Clint Betts
I was going to ask you how you have gone about raising money so far. Did Blue Cross Blue Shield invest when they were super excited? And have you gotten the venture capital route? Give us a sense of how you're thinking about funding this.
Beth Houck
So when Larry developed that concept, he actually did a Shark Tank in Chicago at Matter, which is a health tech incubator. He did the Shark Tank, and Blue Venture Fund was there. So they were kind of like, "Hey, that's our data, and that's our people, and we might be interested." Another organization called Arboretum Ventures, which is out of Ann Arbor, Michigan is also an early-stage health tech investor, so the two of them jointly came to the table.
So they came in with a seed and series A funding back in 2018, I believe, and then that's what launched the whole team. They have stayed as investors. We have gone out to the market and talked, and I'm always talking to investors because they know a lot of what's working and what's not, and they ask good questions. So it's important for me to keep relationships with them. But to date, all of our existing investments have come from internal investors from our team.
Clint Betts
Oh, that's incredible.
Beth Houck
Yeah.
Clint Betts
And how are you thinking about AI and how has that changed the product and the overall growth of the company?
Beth Houck
It's a question that people ask all the time, right?
Clint Betts
Everybody's asking about that.
Beth Houck
And you have to be on top of it because it's happening faster than... I just can't get over it. I can't get over it; just as an aside, I can't get over how much improved AI is in taking notes. When it first started, you were like, "Well, I don't know if I'm going to be able to use this." And whatever, three weeks later, it's already better. So we think about it. I like to think AI is again an enabler, and nobody wants to eliminate in-person care. So, nobody wants to eliminate that relationship between them and their doctor and the nuances that come along with that.
But there's an incredible backlog related to getting in to see a GI visit in most markets, in fact. So, there are clearly not enough GIs out there. So if AI can help streamline the process so that people don't have to get in to see an in-person GI physician as frequently, that's excellent and a good outcome for the patient.
In our world, there are some simple things that we're integrating. So when we collect data between visits, we're collecting a lot of information, and people tend to give you a lot of information if you open the door. Some of it's relevant, and some of it's not relevant. The physician is like, "Thanks, but I don't want to read somebody's health diary. I need it boiled down for me." So we're looking at AI to boil that information down. It's kind of likened to meeting notes in a way that really pulls out the most important pieces of information for the physician at the right time.
Clint Betts
I wonder, as you're talking about the difference in changing from COO to CEO, I imagine one of the differences is you're now responsible for the culture of the company and setting that tone. So how have you thought about building culture? What are some unique things that you've brought to that given that you were the COO before that?
Beth Houck
I think part of why it was a little easier for me to step into the CEO position is I've frequently taken on culture wherever I land in an organization. So, that was an easy transition for me. I care about it a lot. I think that people who feel heard, who feel like they have a soft place to land, who aren't going to get in trouble for making a mistake. I think all of those things breed creativity, and I certainly need good ideas all the time coming from anywhere.
And so that's very important to me. We've done a lot of things to try to keep ourselves connected. I think that ever since Covid, we've been pretty much a remote company, so we have to work a little harder to maintain that culture and maintain connections with each other. Some of the ways we do that are silly games that we play remotely. We love competition, so we do our step challenges against each other and a lot of smack-talking and things like that. So we do that to help.
But I think probably the best way I can help culture happen is by modeling good behavior too. If I go on vacation, I should not be calling them because then they'll think they have to do that when they're on vacation. So, things like that are also ways that I can help culture.
Clint Betts
What do you read? What reading recommendations would you have for us?
Beth Houck
I read a lot. I don't necessarily read all business books.
Clint Betts
Good. I love that.
Beth Houck
I love historical fiction. I love mysteries. I feel like you get creativity and perspective anywhere. I love it. I'm right now reading something called The Diamond Eye, which is a historical fiction based on the true story of a Russian female sniper during World War II.
Clint Betts
Oh, wow.
Beth Houck
It's fascinating. It's fascinating, and it's real. She really was a sniper. And the Russian army really let women in 1941 or from 1940, I guess. That was crazy. So, I'm reading that right now. I think reading is really important because I think it's an escape. It's an escape; it helps you think about lots of things in different ways. So, if you're not reading, try reading. It's good.
Clint Betts
I totally agree with that. What are some products, apps, or tools you use every day that you just couldn't live without?
Beth Houck
So maybe it's my generation, but I use all the basics. I know how and do use all the basics. I am happy with the AI note-takers and things like that now, but I'm not going to lie. My favorite is I really like writing things down. I like writing things down so that I can draw arrows. I like having a diary of what's gone on. So sometimes it's not much. But then, if I need to look back, I have a little bit of a placeholder. So it's not an app, but I do love my spiral-bound little diaries.
Clint Betts
I love that. I love writing. There's something about writing and keeping that note, and you're thinking as you write rather than... there's something beautiful.
Beth Houck
There's something about the actual writing. Yeah, there's something I don't know. I was a consultant right out of business school, and most of my job in those early months was taking a lot of notes and taking them really well. I had little tricks, but if there was an idea that I wanted to remember, I'd put a big eye in a circle. And if there was a to-do, I'd put a big T in a circle, and do you know, I still do that.
Clint Betts
That's so cool.
Beth Houck
So there's things like that. Yes, I could move it to Evernote or somewhere, but I don't.
Clint Betts
Have you heard of or ever tried Remarkable that writing...? It feels like you're actually writing in a notebook.
Beth Houck
Oh, I know what you're talking about.
Clint Betts
And then it saves it and I've been using that lately and it's pretty cool. It's not exactly the notebook still. There still is something cool about that pen and seeing the color and all that type of stuff, but they're getting there to the point where you'll be able to save all of that online too, which is really cool.
Beth Houck
I may do that because you're right, because they make some enhancements so it felt more like writing versus the slipperiness that you feel when you're doing on a pad, right?
Clint Betts
Yeah. The first one wasn't that good. I tried that one, too, because again, I love the writing piece more than anything, but the Remarkable two is really... now they need to sponsor this podcast because we've just talked about them so much. But it's really interesting. It's really cool. How do you stay grounded? How do you focus on mental health for yourself and for your employees? I know that's a big deal, particularly since we saw it explode during the pandemic with loneliness and things like that, and I'm not sure that we've solved it since. How are you thinking about it?
Beth Houck
It is hard. Number one, you have to think about it. You have to be deliberate and intentional so that it doesn't get past you. I think that's a common, say, achiever thing, like, "Oh no, I'm fine. I'm fine, I'm fine. I'm fine." Until you really aren't. And so you have to stay on top of it even when you don't feel fine.
I do mindfulness work, so I am a big lover of the three-minute breathing and those sorts of things. I do that. That's a very grounding activity. I think one of the things I really also do to keep myself sane is ask for a lot more help than I used to. I think both are getting into the CEO role, but also maturity. You realize there are a lot of people who can help you and give you advice. So I do ask for help and try really hard to have a coffee with somebody every other week or at least once a month so that I'm regrounding myself with somebody who can say, "You know that's kind of crazy, right?"
Because sometimes you get in your head and then you just need somebody to reset you. So I do those things. With the team, it's hard. You have to keep your pulse on them, and you have to have that door open so that if one person isn't telling you, their friend is and they're saying, "Hey, listen, the vibe's not good right now, we need a reset."
Clint Betts
Right. That's a good point. So, 2024 was an interesting time to be running a business. The economy was super weird. Some industries were doing really well. In some industries, it felt like you were in a major recession, and maybe we were in some of those industries. It's just really fascinating the way it all shook out. And then there's uncertainty with the election, at least in the United States, but there are elections, 2025 elections around the country, around the world, that we're going on, too. So there's some uncertainty there. How did you manage that uncertainty, and how are you thinking about 2025 now that there's a little bit less? Do we know what to expect? Not you can expect anything. How are you thinking about it?
Beth Houck
In a way, I sometimes... I've had friends ask me, too, "How do things impact you?" And in a way, the idea that we're in healthcare means that we're a little shielded from some of the variation, I believe. The ability to get capital at the rate that you want to get capital is not shielded, but the business of taking care of patients better at a lower cost is relatively shielded. How it plays out will be different based on the priorities of the administration.
So, if less funding goes towards CMMI, which is the Medicare and Medicaid innovation, there are some alternative payment models that sprouted from there. And we might be appropriate for an alternative payment model. The alternative payment model essentially pays a different way for a bundle of services. And so we might be appropriate for that. And if that gets less funding, those opportunities might not be available to us. But right now, we're mostly working with the commercial market, and I would say from a business standpoint, we won't see much change. But back to the capital market part will impact us; you won't grow as fast because of it.
Clint Betts
As you look at 2025 though, do you think it's going to be a little bit smoother, a little bit more predictable compared to 2024?
Beth Houck
I do. Yeah, I do. My world is seeing what the pace of some of the payers is right now. So, like Aetna, Cigna, all the blues plans, and so forth. And we saw a little bit of this in 2024, and there seems to be some clearer... because they feel better, once they feel better, too, because uncertainty is certainly around Medicare is a big deal to those plans. When they start to feel a little more stable, then they can put some attention on programs like ours, which are going to fall more in the innovation area as opposed to their core business, which is making sure they're getting paid the appropriate amount for their Medicare patients.
Clint Betts
That's fascinating. The healthcare part of you has to think about the overall economy, and then you have to think about that sector, which is such a big sector within the United States. It's fascinating.
Beth Houck
It's huge. It's huge. And we need to do lots of things to reduce cost of care, period. We do. It's ripe for opportunity.
Clint Betts
For sure. Sure. I agree. Finally, we end every interview with the same question, and that is at CEO.com, we believe the chances one gives is just as important as the chances one takes. When you hear that, who gave you a chance to get you to where you are today?
Beth Houck
It is hard to always say one person, but I think there was a left turn that was validated. So, I'm going to give this example. So I worked in consulting, and then I went and worked at some academic medical centers so that I could really see how things get built and do it from the inside. And then I was pregnant with my daughter, my first child. The .com boom had kind of been happening, so you felt like you were getting left behind. I wasn't loving what I was doing, and I was like, "I can do this. I can go work on my own. I can go out on my own, get my own clients, and help lots of companies build. I can do this." And so I quit, and it was going to give me flexibility, too, which is why I brought up being pregnant.
And so I did, and somebody gave me my first project. And so it was... I think I told everybody I knew what I was doing and tried to pitch it to all kinds of people, and you just never know where your first thing's going to come from, but somebody said, "Hey, I'll give you a try." And so I think of that because had they not given me a try, I wouldn't have had that validation. I might've cut and scared and gone back and tried to find a regular job.
I ended up consulting for myself and doing lots of projects for companies that were trying to get off the ground for five years. So I did this for five years, and my last project was the company that gave me my first shot at my first startup. So it was that transition that got me going. And so I think that's the one I'll give a shout-out to.
Clint Betts
That's awesome. Beth, thank you so much for coming on. Congratulations on everything you're building. It's really cool. The company is incredible what you've built here, and I think there's blue waters ahead, for sure.
Beth Houck
Oh, love that. Blue waters, I love that. I'm going to remember that. Thank you.
Clint Betts
Okay. Thanks, Beth. Have a good one.
Beth Houck
You too, Clint. Take care.
Edited for readability.