A week in AI is like a year in other industries. I hope these issues become your weekly source of AI information, inspiration, and ideas. If we haven’t met before, I’m Amanda Smith. I write about AI and the fascinating folks who are building in this brave new world.
Good morning. If you’ve ever complained about how much administrative work is involved in being a patient of any kind, you’ll enjoy this week’s story.
This AI founder turned an emergency room visit into a business idea.
This week in AI:
OpenAI to release iPhone rival
Altman says it’ll be “screenless, pocket-sized, and more peaceful.” It’s the company’s first foray into AI hardware.
Bill to criminalize deep fakes
The bipartisan legislation would expand penalties and definitions for fraud to include AI scams.
Nvidia stock falls 4%
The stock dropped after news that Meta might use chips designed by Google.
Company background: Honey Health
Founded: January 2024
Team size: 20
Funding to date: $7.8 million in seed funding by Pelion Ventures, with participation from Streamlined, Burst Capital, and 8-Bit Capital
MRR: Not disclosed
Growth metric: Over 100 customers which includes thousands of individual clinics
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The ex-LinkedIn product lead automating healthcare’s back office
Matt Faustman spent a decade in Silicon Valley in tech. The lawyer turned founder had a successful start-up in the legal space that was acquired by LinkedIn – and landed him a role in LinkedIn’s product engineering team.
He didn’t come from healthcare, nor did his co-founders.
They all, however, had been working in AI before LLMs and had been impacted by chronic disease. Faustman had been diagnosed with type one diabetes and was once rushed to the ER because he couldn’t get a refill of insulin. It was stuck behind several large digital piles of paper.
He was stunned by the amount of administrative work that sat between him and his care team. The paperwork increased every year. When they were exploring the possibilities of AI, healthcare was the first area they thought to innovate in.
The AI application
Honey Health is the AI back office for healthcare. They help primary and specialty care organizations automate manual admin work with a team of AI agents. This includes tasks like data collection, chart prep, orders, refills, prior authorizations, and fax management.
“We’ve gone after pieces of the work we believe that we can do end-to-end, autonomously,” Faustman said. All the unsexy pieces of healthcare.
What’s special about Honey is that there’s no external UI to log into. “Honey’s AI logs into the provider’s electronic health record (EHR), payer portals, data portals and every other tool they use, just like a staff member would.”
Data fetching and entry is a great problem for AI. “Staff members have to log into dozens of different portals to find missing data, patient records, labs, imaging etc. Our AI checks the calendar and then logs in securely to all of those data portals, grabs patient records and brings it back into the EHR and charts, saving hours of work.”
Faustman said they train the AI with key systems, written protocols, and staff interviews. Each agent has a memory, trained on the different specialty and EHR, then the specific organization’s workflows.
This helps staff provide better care, while increasing profit margins.
Product-market-fit
Faustman admits AI in healthcare is becoming competitive, with more companies emerging every day.
“Something that we’ve found helps Honey stand out with customers, get a lot of inbound and win deals is our ability to do this autonomously inside of your existing systems.”
The traditional Silicon Valley methodology is to start with one thing, stay on that for years, then expand. “We felt that in order to have the impact to free major parts of the back office and give providers the ability to scale with fewer headcount, you need to be able to do several things side-by-side on day one.”
So far, that hypothesis has held true.
Honey is going after the middle of the market such as independent primary care practices across 15 specialties and health tech organizations. A lot of these back offices look very similar and run the same back-office rails in terms of faxes, patient data etc.
The business model
Honey works with over 100 organizations which includes thousands of individual providers.
The AI is usage based, so organizations pay per task fee. A small amount gets charged for every task that’s completed. “What we try to do is make sure that the equivalent hourly rate of the AI is less than $5. For higher volume, it gets down to under $3.”
Acquiring customers
Faustman is scaling the business in a few ways:
A traditional sales team
A broader content strategy (that works alongside sales)
PR and media
“It definitely starts with a great product, which is then articulated to customers, whether that be a call or email. We’ve also done well at producing stories and online discussions where our customers hang out.”
Having spent four years at LinkedIn, that’s a big channel for Faustman. He has over 152,000 followers. “I definitely saw what some of the best organizations in the world were doing while I worked there. They were creating connections and adding value to customers they’d never met before,” he added.
“I’m on the front line with our prospects and I connect with them on LinkedIn. They always look at my profile to see what I’m saying.”
The “playbook?” Build relationships and add value – to prospects, customers, and your industry.
Takeaways
Founders should provide genuine value to their industry. Prospects care about the leaders of the organization and the stories/perspectives.
The best tech companies are still human and in-person. The Honey team is in office four days a week in the Bay Area.
The entire team needs to execute at a blistering pace, not just the founders. The teams that are built for and thrive in that kind of environment (using AI to augment their work) will likely end up winning.
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