Matt Schwartz (CEO of Virgo): “Huge opportunity to add a digital layer to GI and endoscopy” (Interview)


Matt Schwartz (CEO of Virgo): “Huge opportunity to add a digital layer to GI and endoscopy” (Interview)

Matt Schwartz (CEO of Virgo): “Huge opportunity to add a digital layer to GI and endoscopy” (Interview)
A few years ago I ran into Matt at one of the GI conferences. At that time, Virgo was taking shape as a storage system for endoscopy videos. With persistence and the right pivoting, it’s amazing what Matt and his team at Virgo have been able to do.
In case you wondered, they’ve captured 400,000 endoscopy videos and that number is growing exponentially. That’s a lot of data.
Virgo smartly partnered with pharmaceutical companies so that they can recruit right candidates for clinical trials. That led to a fund raise of $8 million with FCA Venture Partners and a soon-to-be-announced strategic investor.
Their Northstar goal is to change the standard of care by saving data. You’ve heard of the new adage: data is the new oil. With the advent of AI in GI, it shouldn’t be a surprise then that Virgo will dramatically influence GI care in the coming years.
Watch this one. You might discover a new data ancillary in your own endoscopy room.
What led to the founding of Virgo? Why GI?
Why did they pivot toward clinical trials and pharmaceutical companies?
The business benefit for providers
“The biggest challenge around IBD trials was patient recruitment”
“We’ve captured 400,000 endoscopy videos and that number is growing exponentially”
“It’s crazy that we record 4K videos with our iPhones but don’t capture data of our most precious asset- our bodies”
“We have a lot of runway in the IBD space, but there are other disease areas within GI that we are looking at”
Medical malpractice implications of recording videos
“Video evidence can be a great tool of protection for endoscopists”
“Data is the new oil”
Virgo raised $8 million
“There is a huge opportunity to add a digital layer to GI & endoscopy”

The Transcribed Interview:
Praveen Suthrum: Matt, it’s great to meet you here on The Scope Forward Show. I want to warmly welcome you today, and I’m so glad to have this conversation with you.
Matt Schwartz: Yeah, thanks so much for having me. I’m a longtime fan. I know we’ve been in touch for a number of years now, so it’s great to be here.
Praveen Suthrum: So let me start by introducing you to everybody. So Matt is the CEO and co-founder of Virgo a digital health start-up that uses machine learning to automatically capture endoscopy videos and accelerate clinical trials. Matt has a degree in biomedical engineering from Vanderbilt University. Before starting Virgo, Matt led product management teams in the minimally invasive spine surgery and robotic surgery fields. So that’s quite a switch from spine and robotic surgery to endoscopy video recording. So tell us the backstory, Matt. How did all this happen?
Matt Schwartz: It’s an interesting story. I don’t know that I would have predicted ending up in the GI space, but it’s been a fun journey to get here. When I was at Intuitive Surgical, in particular, working on the Da Vinci robotic surgery system this is back in 2015, I became really interested and passionate about machine learning and computer vision and felt like there was this whole untapped potential for bringing machine learning systems into the world of video based medical procedures and felt like it was a waste. There’s an incredible amount of video data being generated in these procedures that nobody was capturing, and if we could only start capturing it, we could build all the really compelling machine learning to go on top of it. That’s what led me to leave Intuitive and start Virgo. And in the very earliest days of Virgo, we were actually primarily thinking about capturing video from surgical specialties. So in the earliest days, I was speaking with all of the orthopedic surgeons and neurosurgeons and colorectal surgeons that I’ve worked with over the years, and there was some interest in video capture, but it was not the intense sort of interest that you need for an early stage startup. It wasn’t the right product market fit at that time and started doing a little bit of background research and recognized that within GI Endoscopy from a procedure volume perspective, it absolutely dwarfs all of the surgical specialties. Maybe it doesn’t get the same level of attention as surgery does, but from a volume perspective, there’s just an incredible amount of health care going into GI Endoscopy. So actually connected with the dad of a childhood friend who’s a gastroenterologist in my hometown of Indianapolis. He said, there’s this doctor, Doug Rex. He’s right down the street. Actually, Dr. Rex’s endoscopy center is about ten minutes from where I grew up. He’s one of the world experts in colonoscopy, and you should really speak with him. I think he might be interested in video capture. My co-founder, Ian, his dad, was also seeing his gastroenterologist at the time, David Cave, up at UMass. And between the two of them, they gave us a lot of encouragement that GI was really a specialty to look at. We ended up going on Dr. Cave’s recommendation to the Aga Tech Summit back in April of 2017 and just met a bunch of really forward thinking gastroenterologists who thought what we were doing is really interesting, and that, more than anything, pulled us into the gastroenterology space. So an exercise in kind of following the voice of the customer and just seeing where things led us more so than us having any bright ideas of our own and figuring that GI is the place to be.
Praveen Suthrum: Very interesting. Now I recall the last time we met in person, you talked about Virgo as an Endoscopy video recording system. Somewhere along the way, I see that clinical trials have been added, and I’m assuming it was a pivot that you made during the last couple of years. Tell us about it.
Matt Schwartz: Yeah, I think when we look at Virgo, our core competency is certainly in building automated video capture infrastructure and doing that in a cloud based fashion. We still feel like there’s a ton of potential to help Gastroenterologists and Endoscopists in general, easily capture their video data. So that is what the entire Virgo platform is built on, making it really easy to capture high quality Endoscopy videos. In the earliest days, we were selling that as a software solution to hospitals and health systems around the country, and built up a nice business in doing so. But the long term value of the company, we always believed, would come from the data that was being captured and building additional tools on top of that data. Just before COVID really kicked in, we started exploring the pharmaceutical clinical trial space, and again, this was actually largely driven by our key customers, many of whom were principal investigators on pharmaceutical trials, a lot of them in the IBD space. And we were hearing over and over again that the technology available to help facilitate IBD trials is pretty lackluster. And there’s this whole component of IBD trials around Central Reading, where it’s an interesting case where you actually have to capture the video data for patients that are part of the study. And doctors were required to use these pretty challenging to set up laptop systems. They would come in and try to plug everything in the day of the case. Then the laptop would get shipped around the world for the central reading. And so the PI’s were telling us to be great if you could do something around central reading. So we took it upon ourselves, just make a bunch of contacts with pharma executives and innovation leaders in the pharma space. And what we heard was that the central reading was certainly a problem. But the biggest challenge around IBD trials was in just recruitment of patients into these studies. For IBD studies, a big phase three study might take 500 to 2000 patients to fully enroll. And if you look at the data on your typical, even high performing IBD trial sites, they’re only enrolling about a patient per year on average. And so the pharma companies end up having to onboard several hundred sites around the world. Many of those sites actually failed to produce any patients for the study. And the studies still take multiple years to actually get completed. And the impact of this is huge. It’s delaying drugs from reaching patients. There’s a huge financial impact on the pharma companies. Every day the drug is in trial and not on the market, they’re missing out on a ton of money. We started to just think a little bit more deeply about this problem, talk to our advisors, principal investigators, to figure out what some of the root causes were around these low recruitment rates, and ultimately discovered a huge part of it is around screen failure during endoscopy. We kind of put our heads together and realize that the data we’re capturing in endoscopy video and just standard of care encounters can be really powerful as a tool to find the right patients for the right clinical trials. So it was a business model pivot kind of driven by the market need and the fact that pharmaceutical companies, there’s just a ton of opportunities for digital health companies to work with them. And I think in a lot of respects, they can make a better early customer than hospitals and health care systems just based on the amount of capital that they have to deploy into new solutions.
Praveen Suthrum: So are your customers, are your current customers pharma companies?
Matt Schwartz: It’s both pharma companies and healthcare providers. So at the core of what we provide, it’s still really important that we’re helping gastroenterologists to capture their endoscopy video data. Part of the value that we add to a clinical practice is that they can use Virgo for all the great things they can do with their video data. Doctors can build up their libraries, use videos for research projects, training with residents and fellows, quality improvement. We have doctors that actually share videos directly with patients as a patient engagement technique. And so we want doctors to be able to get value on a day to day basis from Virgo. And we think that’s a really important part of the solution. And then our other set of customers are the pharmaceutical companies where we can help them to accelerate clinical trials. We’re actually doing a bunch of other work around trial site selection and optimization, starting to get into the central reading space. We think the platform can really be a central hub for not just IBD trials, but other GI trials going forward. So it’s almost like a two sided marketplace now where we’ve got on one side the provider groups, on the other side the pharma companies, and we’re a technology solution in the middle that helps to optimize the integration between the two.
Praveen Suthrum: I just want to understand this a little bit more. So it is not necessary that the physician on one side and the pharma company are connected, right? It’s separate.
Matt Schwartz: That’s right.
Praveen Suthrum: Two different business units, if you will. So it’s the same solution, but it’s being applied and utilized for different purposes on either side.
Matt Schwartz: Exactly. So it’s the same. The core video capture infrastructure is at the foundation of both sides of the equation there. But the actual features and tools that we put in front of the users are slightly different. Whether it’s a doctor looking to use Virgo to capture ERCP cases for presentations, or if it’s a pharma company that is working with us to help accelerate their clinical trial recruitment or platform that gets installed in the endoscopy suite is the same across the board.
Praveen Suthrum: On the physician side, on the gastroenterologist side. What are they paying you for and what is the business model there?
Matt Schwartz: The fundamental business model is around video capture and video access. So we have an annual software fee that we provide, so we’ll include the hardware as a loaner. There’s no additional charge for the hardware. And with that annual subscription fee, the health system receives unlimited recording, unlimited storage, unlimited user accounts, and unlimited data access. So we’re very motivated to get doctors recording not just some of their procedures, which I think is how things have been done in the past. You recorded very rarely. We’d actually like to motivate people to record every single procedure that they have. And so we’ve set up this model where it’s just fully unlimited. We install the devices for interventional. Advanced endoscopy suites will actually set up multiple devices so you can record endoscopy, fluoroscopy, spyglass, endoscopic ultrasound, all from the same room in the same procedure simultaneously. And again, you can do that fully in an unlimited capacity. And then at the same time for health systems that are interested in getting involved in our clinical trial solutions, working with some of our pharmaceutical partners, we have discount programs that can actually dramatically reduce the cost of Virgo to the provider. And we’re able to then monetize by working with pharmaceutical companies.
Praveen Suthrum: So I get the benefit from training and education from that standpoint. Is there a business benefit for providers to record video?
Matt Schwartz: Yeah, I think there are certainly some indirect business benefits to just improving overall quality training programs are certainly motivated to have higher quality training tools for their trainees. One of the big business motivators has actually been around clinical research on the provider front, too. As I’m sure you’re familiar, whether it’s in private practice or in academic groups, there is a lot of motivation to have high functioning research organizations within those groups. And for GI practices that can run efficient clinical research groups with limited overhead can actually become a profit center for what they do, because the Pharma companies, again, are highly motivated to find sites that are good at producing high quality patients for their trials. And so what we can do for the clinical trial sites, the healthcare providers, is help them find more patients within their pre existing populations that are good candidates for research, and we can do that without them having to add additional overhead. I don’t know how familiar you are with clinical trials right now, but it tends to be a very manual intensive process where you have to hire skilled clinical research coordinators, and certain clinical research coordinators have more experience than others. They’re better at finding and selecting patients and administering these trials. And it can be a lot of overhead. I know there have been some groups, especially in private practice, that have tried to spin up clinical research arms and have struggled to do so. They end up spending a lot on overhead and not actually producing much in terms of patient enrollment. And when they do that, they’re not being compensated by the Pharma companies enough to support the overhead. So we can basically be a free tool that helps them drive a more profitable research center within their practice.
Praveen Suthrum: From the point of view of the pharma companies you’re helping recruit patients for, let’s say, IBD trials, how exactly does the system identify that so and so patient is suitable for this kind of trial? What is in the system that is able to identify this?
Matt Schwartz: Yeah, great question. So IBD trials, they’re a great case study to focus on. They have some nuances to them that make them perfectly set up for this. But we think the similar process will apply for other areas in GI and actually, outside of GI that we’re looking at. Speaking about IBD as an example case for ulcerative colitis and Crohn’s disease trials, there are very specific endoscopic scoring criteria that a patient must meet in order to be eligible for a trial. And if you look at the typical workflow for finding a patient for an IBD study, typically it happens when the principal investigator for the study who’s one doctor within a practice. If it’s a large super group, it could be 100, 200 physicians within the practice, there’s really only one doctor who’s the principal investigator. That physician is generally pretty good about evaluating their personal patient population. And if they catch wind of a patient that they are about to see in clinic that they think might be a good candidate for a trial, they’ll approach the patient and say, hey, we think you may be a good fit. We need to get you a colonoscopy to see if you meet the endoscopic criteria for this study. A lot of patients don’t want to go through an unnecessary colonoscopy, and so the ones that do, they will show up, and you have to hope that the patient does, in fact, meet the right scoring criteria. The screen failure rates on endoscopy, we hear, are in the range of 50% to 70%. So you get a ton of patients that show up, they get this colonoscopy, and they don’t actually meet the criteria. It’s a pretty terrible experience for the patient generally, not great situation for the clinical research coordinator, who puts in a ton of work only to have all these failures over and over again before they get a patient finally enrolled. What we do with Virgo is actually just focus on capturing every single standard of care colonoscopy that’s taking place as part of a patient’s normal journey. So if you have an IBD patient and they’re going to see whoever their physician is, they get an endoscopy. And we’ve developed some machine learning, we call it Auto IBD, that’s creating a predictive score that’s not diagnostic in nature. So we’re not trying to say what the Mayo score is or the simple endoscopic score for Crohn’s disease. We’re simply using this as a triaging score. And so the higher the score is, closer it is to one, the more likely we think this patient is going to be a good candidate. And we create a threshold and start automatically sending those patients to the clinical research coordinator. One of the areas where this gets really impactful is within a large practice. Even though there’s only one principal investigator on the IBD study, most of the partners within the practice do have some level of an IBD patient population. And so we’re helping those doctors for the patients to the principal investigator without having to actually do any extra work. Most doctors, if they’re not the principal investigator, they don’t really know what’s going on from a research perspective. They don’t know all the details of the study. And we can help them automatically identify patients in their population and get them referred over to their partner who is the principal investigator on study. The best way to think about it is almost like flipping the paradigm with recruitment to using standard of care data, which is the video of the endoscopy as the first step in finding the right patients and then getting them into the research pipeline from there, as opposed to just focusing on any patient and hoping and kind of crossing your fingers that their endoscopy is going to meet the criteria.
Praveen Suthrum: Now, these videos. Out of curiosity, how much of video data is generated in GI on a given day, month year? I’m sure you some analysis on this.
Matt Schwartz: Yeah, we’ve done some analysis. I’m a little rusty on the exact numbers. It’s actually challenging to get great numbers on how many GI endoscopies are done in the US. Every year. We’ve seen estimates that range from 15 million to upwards of 50 million On an annual basis. I think the right number is probably around 25 million GI endoscopies or so. And we see within our data set, we’re now coming up, I think, on about 400000 GI endoscopy videos that we’ve captured. That number is just growing almost exponentially. We’ve seen that the typical GI endoscopy is about ten minutes in duration. You’ve got some really short upper endoscopies, you’ve got some really long ERCPs, and then you’ve got some standard colonoscopies there in the middle. So we see about ten to 15 minutes for a typical GI endoscopy video. Now, in terms of how much data is being generated, the question gets a little bit nuanced because it depends on what quality you’re saving the data at, what sort of data compression you’re doing. We try to be really intelligent about our data capture to make sure that we’re minimizing storage costs, but also preserving really high quality video data. So what we see on our end, the way we’ve set up the Virgo platform, it’s roughly one to one and a half gigabytes per hour of endoscope footage that we capture. So it’s a lot of data, and there’s a lot of data that still is going uncaptured today. And one of our North Star goals is to just change the standard of care. We think it’s a shame in 2022 that there’s so many videos that aren’t being captured. Kind of crazy. You can walk around with an iPhone and record basically unlimited 4K video of anything you want. And for some reason, in healthcare, our most precious asset, our health, our bodies, we’re not saving this data. It’s a little bit crazy to me.
Praveen Suthrum: So 400,000 videos, that’s a lot of videos. Who owns this data?
Matt Schwartz: Yeah. So our customers, the healthcare providers, own their data, and that’s really important to us. There’s a lot of incredible potential applications for what can be done with this data. And we want to make sure that our customers are at the forefront of using their own data, whether that’s for research, training, whatever it might be. We also have a number of academic partners who are leveraging their own data that they capture in Virgo to build their own artificial intelligence tools that they’re using, looking to license, and we want to support that. Now, with our customers owning their data, they grant us a license to use the data to provide it back to them in the platform and make improvements to our system. It’s a pretty typical SaaS agreement that allows us to just furnish the actual services and make sure they can view their videos in the cloud and then make improvements over time with that data.
Praveen Suthrum: So when you say license agreement, you pay them for using the videos?
Matt Schwartz: No. So as part of our customer agreement, we’re granted a license to leverage the data. Again, it’s a typical SaaS agreement where in order for us to just even have a portal that they can access, we need a license to put their data back into that portal so that they can actually use the Virgo platform.
Praveen Suthrum: What are your growth plans? Are your growth plans going to largely come from healthcare providers and pharma companies or are you going to go beyond it’s a two sided growth plan?
Matt Schwartz: Certainly our goal is to get Virgo into as many endoscopy suites eventually around the world as possible. We have some plans right now, starting pretty soon and into later this year, to start expanding internationally, both in Latin America and the EU, I think also looking in Asia later this year into early next year. So that’s one side of the equation. It’s just how do we get Virgo into every single endoscopy suite around the world? And a lot of that is coming just through organic growth. We’ve been building out our internal sales team. We also are starting to see some really positive network effects from the platform where we get doctors actually sharing videos with their colleagues at other institutions that don’t have Virgo. And it’s a great reason for us to follow up with them and try to understand if there’s an opportunity to bring Virgo to their practice as well. And then we are starting to build out strategic partnerships. We are taking on a strategic investment from a major endoscope manufacturer that will be able to announce your shortly and working on some commercial relationships with them as well that will help to rapidly scale up our distribution. So that’s one side of the equation. It’s just get Virgo out into the field in as many places as possible. And on the other side is trying to work with as many pharmaceutical companies as possible. We’ve got a number that we work with today and are looking to expand those relationships. We’ve talked about patient recruitment as a major part of what we offer to pharma companies, but again, we’re starting to expand our scope of solutions with pharma companies as well, where we can actually help them identify, optimized clinical trial sites based on historical data that we’ve captured at certain locations and then pick the best sites that are already up and running with Virgo. Then we get into patient recruitment as well as central reading as part of the full solutions that we can offer with the Virgo platform. One thing that’s maybe interesting to talk about on the pharma side is there’s a ton of focus on IBD, the gorilla in the GI pharma space. We’ve got a lot of runway in the IBD space, but there are other disease areas within GI and actually beyond GI that we are looking at now. Eosinophilic Esophagitis is a hot up and coming area for GI pharma, acid reflux, colorectal cancer trials, gastric cancer trials. We think all of these, any trial that could potentially involve Endoscopy in the continuum of care, we think they’re going to be great opportunities for Virgo to expand. And then outside of GI, we’re starting to look at pulmonary and urology studies where we’ve actually started capturing a decent number of bronchoscopy videos at a number of our sites and we’ll start looking to capture cystoscopy videos here in the near term as well.
Praveen Suthrum: Aren’t the doctors concerned that all their video is being captured? Because the medical industry is one of the most regulated and physicians are one of the most regulated professionals out there. Right? So there are point of time, seven or eight different bodies looking at every little thing that they do. I would suspect one of the concerns Endoscopists have would be that their data is now out in the open and it’s for everybody who wants to see, and if they may be well meaning. But let’s say that something has gone wrong now, that data is forever captured for eternity and it’s out there in the cloud somewhere. Isn’t that a big concern?
Matt Schwartz: It’s probably the first major objection that we faced when starting a company. My dad is actually a spine surgeon and so I told him I was thinking about quitting my job and I wanted to start this company where we’re going to record every video that the doctors create. And I thought he’s going to reach through the phone and try to strangle me. He’s like, I don’t want my videos recorded. This is a terrible idea, it’s malpractice implications. And I certainly understand that sentiment and we’ve interacted with that sentiment quite a lot. But I think there’s a bit of a sea change happening where I think people are seeing the other side of the story and from our side. We did a ton of research in the early days to figure out what were the actual liability implications and what this involved. For me, I actually did a whole deep dive into the medical malpractice insurance industry and spoke with experts from medical malpractice insurance companies. And if you talk to them, it’s really interesting what drives the cost in medical malpractice. And it turns out about 60% of their costs are paid in legal fees and the other 40% is what gets paid out to patients in eventual settlements. So they actually spend more money going to lawyers than what goes to patients as part of malpractice suits. And when you speak with them, they’re really motivated to find ways to reduce those legal costs. And one of the best ways to do it is just by settling cases early. Now, with malpractice in most states, you need to have both evidence of negligence and harm. There can’t just be harm done. There has to actually be negligence. The doctor not following the standard of care and what most malpractice insurance companies feel also if you talk to experts who are providing expert testimony, they feel like video evidence can be a great tool of protection for endoscopists. If you’ve got a video showing that the doctor performed a standard of care endoscopy, there’s basically no better way to go to a judge and say, listen, the doctor performed standard of care, this case needs to be dismissed. Or if the video does show that there was true negligence, not just that there was harm or something was missed, but the doctor did two minute colonoscopy and there’s no way they could have possibly done a high quality exam. The malpractice companies would actually rather just settle that case early as opposed to drag it out over five years and rack up legal fees. And so we’ve actually had malpractice insurance companies that are willing to offer discounts on malpractice premiums to practices that implement Virgo across the board to record all their videos. And we think that’s the way of the future. There’s article that was written by Doug Rex where he talks about in radiology, the entire MRI exam is captured. It’s not like you just saved the slice that has the actual diagnosis. They’re really good about documenting everything. And he explains in this article that he thinks the best way to protect yourself as an endoscopist is to have a high quality video recording. And if you’re doing a good job, that video is going to be much more likely to protect you than hurt you over the long term. So it’s a conversation that comes up all the time. I have noticed in the five years since we started the company that I really think things are moving in this other direction where people see this as protective in the way of the future going forward.
Praveen Suthrum: There are a lot of AI companies starting up in healthcare and in GI in particular. One of them went through a huge fundraising cycle recently. I would think that a lot of these companies would actually be interested in video data to apply computer vision, to detect the polyps, classify the polyps and do whatever they’re doing. That seems to be one growth opportunity as well. I’m sure you’ve considered it.
Matt Schwartz: It’s a very active space. I think the investment that we’re seeing flowing into digital health companies in GI specifically around AI, there’s just a lot of motivation to figure out what the future is going to look like five or ten years from now. And I think we’re still in super early stages, like GI genius on the market, but I don’t really know what the future is going to look like from an AI perspective. What sort of clinical diagnostic tools are actually going to receive reimbursement? I think it’s going to have huge impact from our perspective. Again, our core competency is capturing this data. And we are receiving more and more inbound from companies that are focused more on the AI algorithm development, who are hungry for not just data, but actually a platform where their algorithm can be deployed. From the very beginning days of the company, we wanted to provide a product.Day one, as early as possible. We wanted to have a product that can be installed and add value to doctors. And by nature of doing that, we now have this platform where we build some AI of our own that we roll into the platform. But we’re very interested in what other algorithms from third parties, be it AI startups, larger players in the endoscopists that are building AI, or even academic partners that are building their own AI, we’d love to find ways to help them run their algorithms in the real world clinical setting. I think what we’ve seen a lot of is that a lot of AI can remain in the research phase for a very long time. Where you get these publications, it’s a cool proof of concept, but there’s not a clear path to actually deploy these systems out in the field. And so we think as part of having the pipe set up for the videos, it’s a great way to start deploying machine learning algorithms, too. So we’re exploring a number of possible partnerships in the AI space.
Praveen Suthrum: You’ve obviously heard of the phrase data is the new oil, so here we are. But the chokehold in the AI space is not the algorithm anymore. In the earlier years, it used to be the algorithm and the startups were all excited about creating a better AI algorithm that you can just drag and drop from an Amazon website.
Matt Schwartz: It turns out Google is better than everyone.
Praveen Suthrum: Yeah, exactly. And it’s free. So some AI algorithms are free. So that’s no longer the chokehold. The chokehold is data and clean data. Who can guarantee data. So I see a huge opportunity here where both endoscopists physicians on one side, providers can benefit through a partnership. And companies like yours that are making this data usable, if you make it, can benefit because this is exponential. I mean, it’s going to explode.
Matt Schwartz: We pretty early on felt like the algorithm was not the secret sauce here. And part of that was because I realized early myself, as not a machine learning expert, I was able to build these kind of interesting machine learning tools because there’s so much open source available technology out there. And so we felt like the real differentiators would be the data. But with the data, it’s important how much data you have, what the quality of that data is, how you can refine the data. And one of the things that I think is overlooked with data is how fresh the data is. The best AI technologies in the world, when you think about self driving cars or Google search technology. They don’t just have a small data set that’s stagnant, they’ve got a constant stream of ever refreshing data so that they can refine an algorithm, test it in the real world, see how it performs, and so they’re always being able to just move things forward. And so that was really important for us is how do we get data continually flowing in instead of just like we could have always gone and asked a few health providers capture 10,000 videos for us and then that’s it. But we felt like the continual pipes were the important part there. So I think that’s important. And then the other piece that I think is going to be maybe more important than anything is just figuring out the right business model around AI. I’m a little bit skeptical myself about where clinical decision support is going to fit in from a business perspective just because I worry about whether we’re ever going to see positive reimbursement for clinical decision support AI tools and whether that’s going to make sense. So I think that’s a big part of it. It’s just cracking the business model and the distribution piece as well with AI.
Praveen Suthrum: Let’s switch gears to the business aspects of your company. So, congratulations, first of all, to you and your team for the great fundraise. So what can you share with us about this fundraise?
Matt Schwartz: Yeah, so this is our Series A raise. We raise $8 million in capital, which we’re incredibly excited about. We’ve got a great lead investor group called FCA Venture Partners, which is out of Nashville, which is fun for me, my co founder, we both went to Vanderbilt Nashville, so it’s nice to have a national investor. And they focus exclusively on healthcare. They’ve got really deep networks with health care provider groups. They’ve also invested in a number of digital health companies that specifically provide software services to pharmaceutical partners. So they’ve been an amazing partner. The other thing we’re incredibly excited about with the raise I mentioned it before, is that we’ve got a strategic investor coming on board. It will be the first investment out of their corporate investment fund. I can’t announce who it is just yet, but we’ll be announcing soon. And we’re just thrilled to have them on board as a partner, we think not just from an investment perspective, but from a long term strategic relationship, it’s going to make a ton of sense and really help drive our growth forward. So with the Series A, it’s all about building out the team. We’ve already added a number of folks to the team through this year, and we’ll look to roughly double between now and the rest of the year, adding people to the sales and customer support side of the house, as well as building out our engineering team.
Praveen Suthrum: You have a bird’s eye view of the GI space, I must say. Right, so you’re connected to so many different practices providers. You’re seeing the industry from the Pharma side where everything is going. What is the future of GI from your lens as an innovator, as an engineer?
Matt Schwartz: Take everything I say with a grain of salt. I’m certainly biased in the space, but I still feel like there’s a huge opportunity to add a digital layer to what’s going on in GI and Endoscopy at large. I think there’s just, like, so many opportunities for software solutions to come in and help out, and I think we’re still in the very early stages of doing so. We’re pretty friendly with a number of digital health companies like SonarMD and Oshi Health. And I think what they’re doing is incredibly compelling and starting to bring the patient experience much more into the folds when it comes to software. So I think we’re going to see at some point, like the next five years, a digital layer emerge on top of what’s happening in Endoscopy that goes well beyond just Endoscopy report writing. When I look at the EHR is kind of the de facto digital layer of healthcare right now, and I’ve always felt like EHR is the term is kind of a misnomer. To call it an electronic health record is not doing justice to the term health in the equation there. They’re really electronic health billing records. Like, if you look at EHR is designed as a billing tool to facilitate optimal billing in healthcare. And I think there’s still an opportunity to build software that creates a proper health record, a clinical record that’s viable for clinicians to use in day to day clinical practice. So I don’t know if that exactly answers the question, but I think we’re going to get to a point where it’s not just hardware being used for Endoscopy, that there’s true digital tools on top of the Endoscopy stack.
Praveen Suthrum: Matt, it’s been a fantastic conversation. Thank you for sharing your perspective and being open about everything that I asked. Is there anything else that you wanted to share?
Matt Schwartz: This has been fantastic. Thanks so much for having me. I always enjoy your interviews that you post. I think you do an awesome job of just bringing together different minds from the industry and more than anything, love your willingness to put a controversial opinion out there. So, yeah, look forward to seeing more of your interviews and keep that up.
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