This Entrepreneur Raised $175 Million To Make Health Insurance Affordable
After helping others achieve great success for their own businesses, Patrick Quigley set out to fix some of the biggest problems in the health insurance industry. He has already raised $175M for the mission and is revolutionizing how it works with his own healthtech startup.
During our interview on the DealMakers Show , Quigley shared his journey from paper napkin business idea to IPO, how he approaches evaluating and picking the best investors for a startup, and the new way to cover your healthcare costs.
Long before landing in LA where his current venture is based, Patrick Quigley was born in Connecticut and then moved to what is still his favorite city: Cleveland.
He hasn’t yet figured out how to convince his wife to move back to Cleveland from Los Angeles, but he has always been interested in solving problems.
His father was a physician on staff with Duke, which gave Patrick some of his first exposure to healthcare.
As a child, his grandfather gave him $100 in IBM stock. He liked to check how the stock was performing. Of course, IBM missed out on the PC thing, and the stock suffered. Patrick liked engineering, but the IBM stock experience also inspired him to learn the business side of engineering.
Duke offered an attractive program with both engineering and business. It was there he met his wife. Three years into college he decided he wanted to get some real world business experience before he went to business school. So, he graduated and got to work.
Next, Patrick went to work for McKinsey. He was amazed at all of the smart people working there, and was excited about how much he could learn with them (even though he’s not convinced 22-year-olds with no work experience should be advising company boards).
In addition to general consulting, he helped McKinsey launch their branding practice, and gained a great appreciation for people. “It’s not necessarily about what you’re working on,” Patrick says, “It’s about who you’re doing it with.”
Next, Patrick connected with a former McKinsey consultant, Doug Valenti, who was starting his own company in California.
Together in a restaurant in Palo Alto, Doug laid out his business idea on the back of a napkin. The offer didn’t pay well, but Patrick jumped on the learning opportunity and moved to the West Coast to join QuinStreet.
They started in Doug’s house with folding tables, but the company grew fast.
He learned that being part of a small startup team meant being there to pitch in with anything that needed doing. The experience reinforced the importance of the team in a startup when you are going to be tested through hard days.
Patrick learned to be accountable, to always be trying new things and to embrace failure: “If you’re not failing, you’re not trying hard enough.”
Patrick’s wife was then ready to go to law school at UPenn. So, to support her, he took a leave of absence from his job and decided to take some time to do his MBA at Wharton.
He found the MBA classes helped to round out his perspective and introduce him to thinking globally about business.
Still not sure he was ready to start his own business, Patrick returned to the Bay Area to work at software company BEA Systems. At the time they had been the fastest software company to go from zero to $1B in sales.
BEA’s stock had been crushed after the dot com collapse. Yet, Patrick says he saw this as another great learning experience. One that would show him how great companies like this end up faltering, and what he could do to avoid that with his own company later.
During Patrick’s first week on the job, half of the people in his department were laid off. Fortunately, he got the chance to stay and help them return to sustainable business growth. In time, BEA was acquired by Oracle.
Doug Valenti, his former mentor from the Bay Area startup (now called QuinStreet) asked him to rejoin the company. Patrick arrived to build a B2B side of the business and prep the company for an IPO, which happened in 2010.
Some time later, Rory O'Driscoll of Scale Venture Partners reached out to Patrick for help on a portfolio company. The company wasn’t performing to its potential.
Of course, when a VC asks you for a favor, it’s a good idea to try to help. Patrick looked at the company data and made some recommendations. At first, he couldn’t really consider joining the company because it was in LA. But when Patrick’s wife was ready to make the move, he decided he was ready to take on the CEO role of this company.
Patrick pivoted the company, and grew the business around Healthplans.com before it was acquired by MediaAlpha.
Healthplans.com was a consumer site that grew largely because of the Obamacare mandate which imposed a penalty on people who didn’t have health insurance. And while the site was a very popular resource -- 30 million website visitors -- just 700,000 bought a policy. Most visitors didn’t buy anything.
Patrick and his team noticed a bigger issue. The majority of insurance plans had high deductibles, minimal coverage, and were very expensive. It was cheaper for most people to just pay the penalty, and go without insurance.
Then, a personal visit to the doctor and getting a $1,300 bill for an MRI sparked the idea for Patrick’s own startup. When he went to an MRI center with his insurance coverage, he received a $1,300 out-of pocket bill. But when he needed a second MRI from the same provider, and offered to pay cash directly for the service, he was told it would cost $330. Same doctor, same service, same place. Nearly $1,000 difference!
That was the moment Patrick and his cofounder Veronica Osetinsky decided they had to do something.
So they created Sidecar Health: an insurtech company that offers insurance with premiums at 30% to 40% less than what people are used to paying, while giving users Visa cards to pay for care directly, lower their out-of-pockets and be empowered able to shop for the best care, without network restraints.
Sidecar Health is truly changing the dynamics of the healthcare space and personal finances.
Listen in to the full podcast episode to find out more, including:
Raising millions and picking the best investors for your venture · How Sidecar Health works · Patrick’s top advice for new founders
