Lessons from Arvind Rajan, CEO and Co-Founder of Cricket Health, on evolving kidney care through telehealth and patient engagement
Arvind Rajan, Co-Founder of Cricket Health, a company dedicated to intervening on behalf of patients well before they reach the critical stage of kidney failure
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Welcome back to the Pear Healthcare Playbook! Every week, we’ll be getting to know trailblazing healthcare leaders and dive into building a digital health business from 0 to 1.
Today, we’re excited to speak with Arvind Rajan, Co-founder and CEO/Executive Chairman of Cricket Health.
Arvind led Cricket Health which is a technology-enabled specialty care provider for patients with chronic kidney disease (CKD) and end-stage renal disease (ESRD). In August 2022, Cricket Health merged with Interwell and Fresenius Health Partners to form the new Interwell Health, a leader in value-based kidney care.
Before co-founding Cricket Health, Arvind served as Managing Director and Vice President of New Markets at LinkedIn, where he was responsible for the company’s growth and operations in Asia Pacific and Japan.
Arvind has spent most of his career building companies across a wide range of industries. Although the industries have been different, every one of these companies was trying to create transformative change that would have a positive impact on the world.
In this insightful discussion, Arvind Rajan opens up about his career path, the challenges and successes in building Cricket Health from scratch, practical advice for fundraising, and valuable insights for aspiring startup founders such as strategies and tips for conducting productive board meetings.
If you prefer listening, here’s the link to the podcast!
Arvind’s Approach to Building Companies
Arvind has had a diverse career path, having worked in various new industries he wasn't familiar with. Despite the differences in sectors, he believes that the core task of building a company remains the same across industries.
His philosophy revolves around the importance of assembling talented people, aligning them with an inspiring mission, and fostering an environment where they can excel.
“Giving my colleagues the ability to do the best work of their career or creating that kind of environment is the job of the founder and that is why I tried to do it at Cricket or any other organization I was leading.”
Arvind’s Style of Leadership
Throughout his career, he has strived to become a more effective leader at every position.
When it comes to being an effective leader, Arvind recommends adopting a growth mindset by looking at ways you can continuously improve your leadership skills.
With over 30 years of experience, being a better leader means he has grown more comfortable acknowledging what he doesn't know and not letting it hinder decision-making at his companies, including Cricket Health.
The humility in leadership combined with gathering experts, can help individuals build a truly successful company.
Arvind emphasizes hiring individuals with a deep sense of humility. He believes those in a startup or new industry should admit when they don't have answers. A successful team is open to new ideas, is willing to learn, works hard, and focuses on what's important.
Although Arvind lacked knowledge about kidney disease initially, he surrounded himself with experts who filled those gaps.
At Cricket, he recruited experts like Carmen Peralta from UCSF, who dedicated her career to combating kidney disease and eventually became Cricket's Chief Medical Officer. He also sought advice from Glenn Chertow, the head of Nephrology at Stanford. Dr Chertow shared that there was no magic secret to delaying kidney failure, and that the health care system’s focus on dialysis rather than upstream intervention was due to misaligned financial incentives and priorities.
With the combined knowledge and experience of such experts, Cricket Health developed a unique approach to kidney care, leading to the company's success.
The Value of Hiring Overqualified Individuals
Prior to founding Cricket Health, Arvind spent six years at LinkedIn. Initially, he joined as a consultant tasked with crafting the narrative and composing the pitch deck for LinkedIn's Series D investment round, which successfully secured over $75 million in funding.
Around 2007 and 2008, many people wrote off LinkedIn and did not think it was going to be a successful company.
“At the time, the prevailing view was that Facebook, which owned people's personal graph and helped create a network of friends and family, was going to also own people's business graph and professional network. There was a growing belief that there was only going to be one network, which everyone thought was going to be Facebook.”
However, Arvind and much of the LinkedIn team had strong convictions for what they were building – beginning with the belief that one’s professional identity and graph was fundamentally different from one’s personal one. As the organization grew and scaled, they placed a premium on constantly bringing world-class talent into the company, seeking individuals who were overqualified for their roles.
"It taught me a crucial lesson about fast-growing organizations: If you hire individuals who can only perform the specific tasks they were initially hired for, they will quickly find themselves overwhelmed within six months. The reason is that job roles evolve rapidly in such environments. Therefore, you need individuals who are somewhat overqualified for their current positions, enabling them to adapt and grow as the job's scope expands.”
How Cricket Health Got Started
In early 2014, Arvind left LinkedIn with retirement plans. However, he soon realized that the most fulfilling moments in his career were when he tackled complex problems that had a positive impact on the world.
“One day, I happened to meet a fellow parent from my daughter's kindergarten class who had experience as a healthcare VC who left and was thinking of starting a company. We started discussing ideas, and the notion of collaborating emerged and that is how Cricket was born”
Initially, Cricket's focus resembled that of a concierge medicine business, not kidney disease. Despite raising some funding, Arvind began to doubt the company's potential for the transformative impact he had envisioned, nearly leading him to pull the plug.
About a week before making that decision, Arvind had a conversation with a friend who enlightened him about kidney disease and the challenges patients faced in their journey.
Kidney disease was a broken part of healthcare, marred by misaligned incentives, leading to a system that primarily intervened when patients' kidneys failed, necessitating life-saving therapies.
The state of kidney care for so many years was centered around dialysis.
In 1973, when the federal government made the pivotal decision to fund dialysis treatment for patients of all ages (Medicare end stage renal disease (ESRD) program), it marked a momentous turning point. Prior to this, kidney failure was often a fatal condition. However, with the government's commitment to funding dialysis, it triggered a surge in the establishment of dialysis centers, effectively shifting the industry's entire focus towards dialysis care.
Despite dialysis being the default choice, immediate dialysis was also the most expensive option and was associated with poor quality of life for patients.
Arvind, along with his co-founders Vince Kim, James Chaukos and Brian Guaracci, had limited knowledge about kidney disease when they began, but they were determined to educate themselves thoroughly.
“My co-founders and I started by immersing ourselves in every available clinical paper on kidney disease. We even reached out to the authors to glean further insights. We conducted interviews with hundreds of kidney failure patients, both over the phone and in-person at their homes across the West Coast. We wanted to understand the patient’s journey and come up with our own thesis on how to improve their care.”
From their extensive patient interviews and market research, there were several key realizations some of which are below:
Late Diagnosis Regret: A common sentiment among patients was the wish they had been informed about their disease progression much earlier, often feeling they discovered their condition right at the brink of kidney failure.
Emotional Overwhelm: When patients are on the verge of kidney failure, they often feel overwhelmed and fearful, making it a challenging time for them to make complex treatment decisions.
Feeling of Isolation: Many patients expressed feelings of isolation due to the often asymptomatic nature of kidney disease, wishing for connections with others who had experienced the same journey.
Connecting Patients: One successful initiative was connecting late-stage kidney patients with those who had previously navigated the disease, receiving positive feedback.
Research-Driven Approach: Unlike some companies that rush to market, the emphasis was placed on rigorous research, testing, and validation of solutions before introducing them to the market.
The Cricket Health team, enabled with these insights, sought to understand whether it was feasible to establish a kidney care company that prioritized slowing disease progression, minimizing hospital admissions, and exploring alternatives to in-patient dialysis. The vision was to provide scalable solutions for patients managing advanced stage chronic kidney disease (CKD) and end-stage renal disease (ESRD).
“Even before we had a customer, we were publishing peer reviewed scientific research, validating what we were doing, testing what we were doing. And so that was sort of the approach we took meant it took us a little longer to get something to market. But when we came to market, we could achieve some pretty remarkable results, because almost every piece of what we had done had been tested and validated.”
Raising Money from Investors
In the beginning it was extremely tough to raise money, none of the seed investors for Cricket Health were from the healthcare industry
“Investors didn't really care and neither did payers and so it was a real hard slog at the start for us to fundraise”
Arvind emphasized that he and his team leveraged their relationships as an avenue for funding.
“All of the original investors were our friends and about 75% of them were from LinkedIn who wrote checks not because they believed in the company but they believed in us.”
In October of 2016, Cricket Health raised 2.5 M for their seed round but by the summer of 2017 they almost ran out of money.
In retrospect, Arvind believed that he did not raise sufficient capital for Cricket Health in the beginning. He underestimated the time and resources to innovate within the healthcare sector.
“The summer of 2017 was a difficult period. I came home to my wife and told her that the company was running out of money. I asked if it would be possible for our family to contribute a personal check to ensure the company's survival. Thankfully, my supportive wife agreed, and we were able to keep the company afloat for that month.”
Arvind kept writing personal checks to the company for the next 5 months to help continue the mission and work of Cricket Health.
At that time, we were still in the process of gathering sufficient clinical data to showcase the efficacy of our approach. This lack of concrete data, combined with a disinterest from payers primarily focused on cheaper dialysis solutions, placed us in a challenging position.
Fortunately, by early 2018, their clinical data started showing promising results, and the team even submitted their first clinical paper for publication.
The team's intervention upstream helped shift more patients towards prepared dialysis starts, rather than beginning with a central line in the hospital. This approach also increased the number of patients using home dialysis, which ultimately reduced costs for payers. This achievement caught the attention of customers and made payers see its value.
In the fall of 2018, Cricket Health was able to raise 24 million in its series A round led by investors like Oak HC/FT, Cigna Corporation, and LifeForce Capital.
“In retrospect, if I hadn't made the personal financial commitment, Cricket Health might not have survived its early challenges. What I believed in my core is that we were doing the right thing and eventually there would be a customer and investor base for it”
Cricket Health’s Transformation of Kidney Care
There are numerous instances when patients come into the ED and get diagnosed with kidney failure and had no idea that they were having worsening kidney function
Carmen Peralta, CMO of Cricket Health, was mainly concerned about early detection and prevention which was not an area that was getting much focus or attention during the time. She, along with others, had spent significant time building models to detect kidney disease
“Not all patients with stage 2 or 3 kidney disease will inherently not progress to kidney failure (stage 5 with a GFR < 15 or dialysis). So intervening for all those individuals may not make sense. Instead you have to intervene for those people who are most likely to progress and get into kidney failure. This was one of the foundational elements of Cricket Health: building predictive models to identify individuals that are at high risk of progression and intervening for those individuals.”
The company’s first offering was Health Options Patient Education (HOPE), which connects advanced stage CKD patients to content, clinical expertise and a network of healthcare professionals, peers and mentors.
In addition to HOPE, Cricket Health developed machine-learning algorithms to identify persons with CKD within hospitals’ electronic health record data, as well as additional knowledge-rich decision-support systems to improve CKD management throughout the patient journey.
Cricket Health also worked with risk-bearing payers and health systems to identify high-risk patients well before kidney failure and focused on preserving kidney function as long as possible.
Cricket Health's treatment plan prioritizes slowing the progression of kidney failure, keeping patients out of the hospital, ensuring prepared transitions, and supporting patients on any ESRD treatment path.
This is done by combining in one provider: a nephrology practice that provides remote, in-person, and at-home care; a multidisciplinary care team to coordinate care and manage outcomes; state-of-the-art technology to provide patient education and 24-7 peer and clinical support; and dialysis care either at home or in redesigned centers that put patient empowerment first.
Selling to Payers and Providers
In the healthcare sector, especially when dealing with transactions between payers and provider organizations, it's crucial to acknowledge that the process can be quite time-consuming.
It's essential to ensure you have sufficient financial resources to support your operations until you secure your customers.
When engaging with payers or providers, having a dedicated internal advocate is of utmost importance.
Success is unlikely without someone who genuinely believes in your offerings and is willing to champion them.
Healthcare tends to be conservative, often leading organizations to resist new initiatives. Therefore, gaining commitment from organizations and identifying internal advocates is critical.
In healthcare, it's not just about having the best product; building strong relationships is equally important, especially when dealing with payers and providers.
“At Cricket we focused significantly on product development. We observed competitors with arguably less impressive products but stronger payer relationships achieving faster success. That said, our product focus wasn't a mistake. It eventually led to better patient outcomes but, I would have balanced our early focus with more emphasis on building relationships in the payer space.”
As you navigate partnerships it is also important to bear in mind risk. One of the fundamental principles in the startup world is to embrace calculated risk.
However, healthcare presents a unique challenge because people's lives are genuinely at stake.
At Cricket, the importance of differentiating between business risks, which should be embraced, and patient risks, which should be avoided, was stressed.
Identifying and navigating these differences effectively is crucial.
Arvind observed that over the past six to eight years in healthcare, many organizations have been noticed either taking unnecessary patient risks or being overly conservative and not taking enough business risks.
InterWell Health, Cricket Health, and Fresenius Health Three-Way Merger
From the inception of Cricket, the intention was never to establish a niche company with an impact limited to a small number of patients. Instead, the vision was always focused on creating something transformative on a massive scale, affecting hundreds of thousands of patients.
After securing their Series A round in 2018, Arvind had a conversation with Robert Sepucha, who is now the CEO of InterWell Health regarding the possibility of forming partnerships with industry giants like Fresenius or DaVita, given their extensive reach.
Initially there was some skepticism about the feasibility of such a partnership, but a successful deal was forged last year.
This partnership was aimed at expanding the clinical model and approach of Cricket Health, thereby extending their impact on a much broader scale.
This vision has now become a reality through InterWell Health, and there is a palpable sense of enthusiasm regarding the company's plans to enhance health outcomes for individuals with kidney disease and lower costs for both public and private payers, health systems, and all stakeholders responsible for the care of this vulnerable and intricate patient population.
Running an Effective Board Meeting
It is essential to understand that management teams run companies, not the board.
The primary role of the board is oversight and governance.
In cases of ineffective management teams, the board reserves the authority to replace them. However, they should not be mistaken for the operators of the company.
Often, board meetings can deteriorate into superficial displays, where the executive team expends considerable time and effort to orchestrate a presentation for the board.
This approach, particularly in the context of early-stage companies, represents a missed opportunity.
The core purpose of a board meeting should revolve around discussing the challenges the business is confronting, harnessing the board's collective expertise to identify solutions.
There should be no hesitation in sharing challenges with the board.
A productive board meeting is not about merely "getting through it" but rather extracting valuable insights from it.
When forming a board, the objective should be to recruit members who will challenge the company's leadership.
Some of the most effective board members are known for their rigor, posing tough questions and pushing the executive team's thinking.
A leaner board is often more efficient and effective
During fundraising, it is advisable to exercise discretion when assigning board seats.
The focus should be on the individual board member rather than the reputation of the firm they represent.
Regrettably, certain board members may exhibit counterproductive behaviors, such as a desire to appear as the most knowledgeable person in the room or an inclination to catch the leadership off guard with their inquiries.
It is crucial to exercise caution with such individuals, as they can consume significant time and energy.
Advice from Arvind:
When pursuing your goals, prioritize the identification of challenging problems to address.
Look for opportunities to collaborate with skilled individuals, especially those with whom successful partnerships have been formed previously.
Above all, value the entire journey.
Many individuals are drawn to startups because they appreciate the process of building companies.
Embrace the adventure and savor the excitement of creating something from the ground up; there's truly nothing quite like it.
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Interested in Cricket Health? Learn more on their website and LinkedIn
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