I’ve really enjoyed reading your SubStacks, especially the healthcare-focused pieces. Companies like Abridge and Ambience have been gaining traction by addressing major pain points in the U.S. healthcare system—physician burnout and the excessive costs tied to administrative tasks. Given Microsoft’s Nuance has both the resources and existing EHR integrations to scale more quickly, how do you see smaller players carving out a durable economic moat? Is it purely an AI performance game, or do you think workflow specialization and customer relationships can create defensibility?
Additionally, would love to hear your thoughts on investing in pharma services and if you see stronger opportunities in CDMOs, CROs, or SMOS
Good question. I think newer / smaller players can take on incumbents in two steps: 1) They need to be easier / better for users to adopt. Ex: Abridge started with just having a much better product than Nuance. Ex: SmarterDx started by just having a much better revenue / charging model than Accuity. Because there is so much referential selling in healthcare (more so than many other industries), getting word of mouth distribution on your side with easy onboarding is a key step. 2) They need to be harder for users to get rid of. Now that Abridge (or whoever else) has beaten Nuance at getting into customers, how can they stay in? This will depend on if they can find new products or ways to become integrated in more workflows and systems, so that it is very hard for customers to switch, even if the underlying product / tech becomes less differentiated over time.
I’ve really enjoyed reading your SubStacks, especially the healthcare-focused pieces. Companies like Abridge and Ambience have been gaining traction by addressing major pain points in the U.S. healthcare system—physician burnout and the excessive costs tied to administrative tasks. Given Microsoft’s Nuance has both the resources and existing EHR integrations to scale more quickly, how do you see smaller players carving out a durable economic moat? Is it purely an AI performance game, or do you think workflow specialization and customer relationships can create defensibility?
Additionally, would love to hear your thoughts on investing in pharma services and if you see stronger opportunities in CDMOs, CROs, or SMOS
Good question. I think newer / smaller players can take on incumbents in two steps: 1) They need to be easier / better for users to adopt. Ex: Abridge started with just having a much better product than Nuance. Ex: SmarterDx started by just having a much better revenue / charging model than Accuity. Because there is so much referential selling in healthcare (more so than many other industries), getting word of mouth distribution on your side with easy onboarding is a key step. 2) They need to be harder for users to get rid of. Now that Abridge (or whoever else) has beaten Nuance at getting into customers, how can they stay in? This will depend on if they can find new products or ways to become integrated in more workflows and systems, so that it is very hard for customers to switch, even if the underlying product / tech becomes less differentiated over time.