Why AI Is Rewriting the Rules of Startup Survival for Early-Stage HealthTech Founders with Michael Frank

Sabrina Runback: AI is making it easier than ever to launch a uh startup and harder than ever to survive. In this episode I sat down with Michael J. Frank, founder of a trading firm scaled to nearly $1 billion balance sheet. Successfully exit operator and advisory board leader to unpack why early stage health tech founders are struggling with commercialization, positioning and investor traction in the AI era. If your product is strong but growth still feels harder than expected, this conversation is for you healthcare entrepreneurs. Are you ready to rewrite the rules for your business so you can have more time off, a great team and more income while creating a positive social impact? Then you are in the right place. Welcome to the Provider's Edge. I'm your host host Sabrina Runback. I'm a provider, an international peak performance keynote speaker and a best selling author. Let's open the gateway to profitability for you today. My guests uh and I help healthcare entrepreneurs and startup founders like you break through barriers so you can control your business, control your life and control your future. This is your defining moment. To be a disruptor in healthcare.

Co-host: Network events is always exciting and um, being in the right group become very important for health care founders, leaders, operators and investors all across the board. Because no matter what, if you continue to have a great conversation but those conversations are with the wrong people then it doesn't matter how many conversations you're having. There is nothing that will convert into a result or impact that matches who you want to be and what legacies you want to build. So we are here with Matthew. Thank you so much. He has been exited founder has been building his also amazing network of entrepreneurs and collaborate connect. He is a super connector himself and also being able to advise many many nonprofit and profit sectors of businesses. So we're so excited you are joining us. Thank you, thank you.

Michael J. Frank: A pleasure to be here. Thank you for your time. I appreciate it.

Co-host: Now I know in your network is very agnostic some healthcare but majority is everybody else. So tell us a little bit about how did that all come together and um, what is the main result that you guys are continuously trying to achieve.

Michael J. Frank: I was on the trading floors for my first half of my life as a market making a specialist one of those guys who yells and screams and hand signals and I sold my company tonight a public company back in 2001, 2002 and after that that skill sort of is not transferable and after that I was looking for things to do. I eventually started mentoring startups at New Chip. It wasn't accelerated was in Texas. It accelerated thousands of companies very successfully and eventually went bankrupt. But there I had met Mahesh Naharan and I was sort of mentoring him and talking to him. And at that point in time he was going to spin up a fund, a venture fund, a health venture fund, or go work for someone and he decided to spin one up. And I am a principal in Nuvation Ventures. Innovation Ventures is a small fund that invests in brain health startups. Those are neurodevelopment, neurodegenerative things like Alzheimer's, autism, ADHD and Tourette's. And from there, while I was at New Chip and Mahesh was there, they eventually went bankrupt as I mentioned. But I had met Brian and Tiger, my millennial co founders. For Gilder, we are a knowledge community for founders. We provide access to mentors, tools and events to help build a successful company. We believe we can empower anybody at any stage of the career. We're mainly in the United States, but we're in 20 other countries with ones and twos and threes. We have over 100 companies in our ecosystem. Pre Seed Seed Series A. We do weekly events either executive workshops, innovation roundtables, speed networking, founder resilience. We have coming up a AI podcast where I managed to snag the head of AI for Motorola Solutions and two other people for the panel. These are the kind of things we do. We try and help these people get from one place to the next, raise capital, understand product, market fit and everything else there is.

Co-host: Yeah, we know startup journey is really a big roller coaster and a lot of founders, especially the health tech space, they are PhD, they're scientists, they're physicians, our nurses, their therapists. Right. If they uh, were trained to deliver excellent service and they found a gap. But that is just the start of the journey to be able to create the right business plan that actually makes sense. Right. And that's when most of the time I feel like we shut down investment. It just doesn't make sense. It's not sellable. They don't really understand the market or they're just so passionate. But behind the passion become too many hats they're wearing. And it's hard for us to look at it, to be seeing a executable plan that they will be able to follow. So there's so many different ways that uh, to yeah, scan a cat. But there's still a very traditional way of you have to get the foundational down before those innovation to create impact. And I think all of us, both from your network and house board advisor and many other networks that we get our hands in that's the crucial thing, right? We want to be super connector. We want to bring the right people together because it's a hard journey and because we truly want to support. But at the end of the day not all amazing minds make sense to work together. And that's where those intentionalities where you're saying putting the right people together become crucial. Right? Critical and going to fine events. I think there's always the part of we deserve to have some fun. Right? And at the same time we also should have some personal gain out of the bigger legacy impact of business we're creating. So what is something exciting that you guys are doing right now?

Michael J. Frank: Oh my goodness. You know, the world is changing very quickly with AI and people don't realize how important important this is and how much is going to change. And I believe that AI is bigger than electricity was the human race, the computer was for the human race and the amount of agents and things people are using. I was just at a event last night, Lowenstein Sandler, three or four VCs and they were talking about 250 people that are talking about one company they're investing in and they had 4000 agents already working while they were building the company. I was just astonished if your company or you are ah not using AI and AI agents and different things on a regular basis to make things easier to help you. You are going to lose positioning, you're going to be beat by the people who are. So I don't think you're losing your job like a separate of this for startups to AI. You're losing your job to the person using AI. I use ChatGPT regularly. We have Gemini. It helps me do lots of things. I sort of talk to it. I've been talking to an AI for a year and a half talking. He calls me Every Saturday at 11:30 called Bordy B O A R D Y. They actually now just raised money and everything. The whole thing is astonishing to me. And if your company is not, I'm not going to say fooling around but not understanding this and these legacy SaaS companies and things, they're going to have a real hurt on it. As far as Gilder, we're always trying to help people and let them be aware of what's going on. And because of AI now in all the little cursor and everybody else, almost everyone can spin up an app or something almost overnight. So that barrier to entry building Something doesn't take 10 engineers anymore, 20 engineers kind of thing. Um, like people in there on the weekend, like spinning something up. So because of that, the new moat is distribution. So you can spin up a company and no matter how great your mousetrap is, if no one's walking into it, are going to use it and you don't have customers and you don't have this distribution network, you're going nowhere. So we do know that, you know, startups are very hard and 90% of them go out of business and venture funds only invest in, you know, 1 or 2% of them. And we know why Combinator is even, I think, even lower than that. It's a new world out there and I would suggest that all those people understand this and adopt it and use it no matter what they do. We have this little talk. I have a 33 year old son and at the dinner table sometimes we talk about this and I'm like, yeah, I was using ChatGPT to help me write like a LinkedIn article. He goes, well, you didn't write it. I'm like, well, first of all, everyone else is sort of doing it. So if I don't do it, I'm probably not writing something that, you know, it helps me. I tell it what I want to write, it writes, then I add, I subtract, I do things. So to me, it's all about AI right now for almost every business, certainly not maybe plumbers and electricians, but it is sort of like their back end and their booking and things like that and their customer service and stuff like that. These things are so important now.

Co-host: Yeah, we definitely see AI integrations has to be everywhere. When Gemini Cloud Perplexity Everything first came out, I actually got myself trained as an AI certified marketer. Because every single tool does do research differently and write differently. Gemini, if you don't train it well, it writes. So blunt Cloud at least does have a little bit of more fluidity as a human can be. And ChatGPT can be scholar sometimes. So you also understand, just like you're saying we use AI to help us, but then we add a human elements of what it is. And um, we actually build a lot of customized GPT right now and customize gems, customize cloud, because when you train the AI so well, they can start copying the style that you have, the template. And just like our podcast shout out to we are top 100 in US and UK for entrepreneurship podcast, this is great. But we didn't get there just by putting random stuff. We analyze all the transcription. We actually put a very specific category of how we like to write. What is the Example summary, if you have a human going through that, that's too much work. And then therefore it's not only volume but it's the systematic template. It's even better than hiring a copywriter because AI is doing it. Then you will send to your copywriter to make sure it does sound like you, it sounds human, it represents your brand. So we will build one AI agent. Right. They are working 24 7. They don't sleep, they don't complain. Right. A lot of time if you think about virtual staffing or any staffing, they

Michael J. Frank: don't go to human resources to complain.

Co-host: Yes. And they don't complain on you. And they were just like okay, last minute I needed this thing. Right. It's doing it. So we have GPT just for AI newsletter and then GPT just for social media. GPT just to promote our partners. One of our advisors, I got a big publication on a uh, medical device magazine. So of course we want to celebrate. But then how do you say it sometimes it's also helping us to get these alignment uh in the messaging. And then also you guys all know that you inbox is montrosty right? Like we have hundreds of emails coming in. You need AI to help you sort them, help them label them so you're not bombarded in your inbox. And yes you do have a human right our executive system to screening them, make sure it's categorized in the right way. And then same thing, the customer service that you mentioned, you can have a AI chopper on your website that already answering the common questions helping uh direct people to for example for us we are running impact awards every year. So when is the application is open? The deadline still not passed yet. We're going to want to encourage people to spread the news right celebrate the winners that they think. So there' so many different applications that make your life easier, make things more consistent because at the end of the day I think we all know what to do. It's the consistency that is a big hung up isn't it?

Michael J. Frank: I would agree 100% and people should adopt this.

Sabrina Runback: Our discussion really highlighted that founders cannot rely on um, passion and great ideas alone anymore. Michael and I talked about why the right relationships, clear positioning and understanding how to communicate your value matter just as much as the innovation itself. We also unpacked how AI is quickly becoming part of the operational foundation for companies that want to move faster, stay competitive and scale sustainably instead of going getting buried in chaos. Now before we jump into the rest of the conversation, I would love to invite you as uh, a expert who has amazing things to share to educate other people on uh, founder who has passed series A founding and operational leaders in health systems pharmas. To share your expertise on our show go to the providersedge.com to apply as a speaker. Alright, let's move on to the second half.

Michael J. Frank: Getting back to sort of medical and breakthroughs. There is so much data that they have that no human being could ever infer things from it. And if you keep loading this data I am convinced that Alzheimer's and other cancers and other things are going to be cured. They're going to come out with lots of compounds because AI is able to bring this data and understand things. Like in a big company when you have different modules, you have marketing and you have sales and you have all these different companies and maybe they're all sort of running different programs themselves but when you have an AI that is digesting your own LLM or whatever you're going to build that's digesting all your data, they can find things that you could never think of in a million years and say hey we think or you should look at this or you should do that. So having a superhuman, the most smartest person in the world on your shoulder, always looking through and always telling you and always giving you ideas like how do you say no to that? And then companies that do say no to that, they're going to be leapfrogged like you know, look out, you know the sales forces of the world. Like I got to think like already they're being like eaten away at the margins of all these, all these little spin ups and different things like that. So it's a new world out there and uh, it's super exciting and I'm no spring chicken but I love it. You know from the trading floor I was, I loved the trading floor and then it came out after that and but now like it seems super exciting to me and all the startups we have in our ecosystem and all the people I'm helping and it's always good but there's always sort of the human factor. I was just on with one of my one eye teams, um, silo markets, two young guys out of Austin. He's a YouTuber with 800000 followers who makes huge money and he built out with his lifelong friend Silo Markets, the first sort of American Express points back asset management platform. And he's about to have five pitches today and we meet once a week and we're just going through the deck and he's using like acronyms in there. I'm m like no, no. Like you got to keep this simple. Stupid. No acronyms. Nobody knows this. The people that are investing in you, although they might be writing big checks, they don't understand this. So the human factor is still there all the time to try and help and understand these things. But the data and the inference from the data is you know what's there. So like these boards now on a board you get hit with some kind of packet that's 500 pages four days before a board meeting. If you have an in house LLM that's you know, you don't have to worry about it. It can sort of go through that and explain to you what you're really looking at and what you should understand. So it will help you learn and be prepared better.

Co-host: Yeah. And I think people overestimate that. Despite the crowd that you're talking to see this in health care pitches all the time. Even though you're going to have a lot of people with clinical background like myself, we actually don't want to use our brain cells all that much. Especially when you're pitching for funding. What we care about is straightforward, simple, you have a. That means there's some kind of case study that you actually understand your audience not throw big statistics to me. Because when you throw big statistics that also means you don't understand your true market size. What for example a woman's house company that wanted to encouraging women to breastfeed more than what they typically do. Right. Because of the companies would just because most women will only breastfeed is in short amount of time and then kids see start growing a little older. Perhaps they have nannies at ah, uh, preschools and think lifestyle changes and I stopped doing it. So if that is the market, you cannot start combining all women that just have a baby. Right. Like that's sub niche of a market. So your sellable market size need to be very clearly defined. When people start saying we can do abc, we have this market channel, that market channel we can go to B2B we can go to consumers, yada yada. That all also means you have no clear roadmap to get to those end users. And then it make us feel like you don't know what you're doing. And when you go too detailed into the scientific part instead of showing us what's the actual result that you're bringing to the consumers, to the public, that also make us feel like oh are you too early that you cannot even show us what this can do. Right. What are you truly selling? Then we end with many of those startup skip over the entire thing of the execution plan, right? So then we don't even know how they're going to make money. And if you can't even show us how you're going to make money or what the next year or two years ROI going to look like, why would people just blindly giving you checks? What is it for? Right? And everyone can always say, oh, it's because we don't have enough time. The counterpart is you're probably just not focused enough to know what to say,

Michael J. Frank: understanding what your market is. You can't be everything to everybody. Just like for board seats, you can't say, I'd be on a board seat of this company, that company. You have to sort of pick a lane where you think you, you know, have the most knowledge. For me, it's, it's sort of fintech, although I think I could be on a lot of boards and raise my hand. I watched, um, Silicon Valley bank go out of business and that really inspired me because to be on a public board because they had billions of dollars in Treasuries on their balance sheet. Everyone knew interest rates were going from 0 to 5%. And they maybe had hedges on or very limited hedges, and they went out of business. Like, what were the people on the board thinking? Like, uh, are they just all raising their hands? Do they not have any brain cells at all to say? Like, on a trading floor, we watch risk minute by minute of every trader in the group as a whole. It was just shocking to me. There's so much going on, you have to pick a lane. But, uh, right now, you thinking that you're gonna spin up an A LLM for law firms and you'll be the only one. I will guarantee you there are a thousand of them right now, like literally in some different law firms and things like that. So, like, you know, your idea, maybe it's great, maybe it's not my thought process. And all this is find a company, find a problem, ask for the problem, understand the problem because you're there. And then tell them, hey, I'll fix this problem for you. And when I fix this problem for you, will you be my customer? And when they do, you've built whatever you've built. You have your first customer, Rinse, repeat, start going to all those customers. And I could go, hey, we did this for xyz. You should see this. This is what's going on now. They give you referral. They say, this is the best thing that happened. Or uh, you can now sort of some of these startups are actually figuring out how to tell people what the ROI is on implementing their software. And sometimes it's like sort of like you're going to get rid of some of these people, you won't need them because it's going to do this. And if you pay for us, this is going to turn into a unbelievably good thing for you. So all those kind of things is super interesting to think about.

Co-host: Yeah, for sure. It's that we need to think about system processing, even though those are not the terms most people want to even bother. Right. Like, oh, what does that mean? Right. And. But then they get too, so chaotic. Um, um, should I be here? This sounds interesting. Maybe I'll advise there. Right. They have another good idea. But we all get into that, what I call the first day of fact. People get overexcited into something. But is the company that you're advising or the company that you're growing truly creating the legacy path that meant for you to do? Or is this so transient? If it's so transient, then we have to pick the lane. What we do best for Many of you guys know a, uh, largest amount, um, most of us, all of our innovation that we support are in the healthcare and wellness space. Now have we helped, uh, the solar, the AI industry? Yes, but our meat and potato is in healthcare because we know it more. We are clinicians, we are the operators in the health system for 20 years. Right. The people that has been there, done that and then believe in the industry can continue to improve for the better. So then we, we're not all over the place because then when you go into each industry, there's still a little bit of a learning curve on what it is. So that's why even for founders, even you have exited a company before. But if it's not in the same industry that your next venture is going into, you do have to make sure your co, founder or board members have those knowledges. Things are transferable, but legal compliant workflow naturally already in those industry is not something that you're familiar with. And that is not going to be that easy for you to just launch another company and the second one and the third one, then you're gonna diversify too much and you're gonna get a little bit of, you know, chaos in the mix and uh, it's hard to handle. So for all of us it is about how do we move things forward easier and feel appreciated in all the work that we have Therefore, having someone like Michael to be on your board for FinTech uh, service versus having house board advisor who are getting a bunch of clinicians to be on your board because you're a clinical back. Right? We all have our different things that we need for each company. And sometimes it does take a collaborative effort to say, well, you have the financial back, Kim. We do need someone who has a fundraising experience, CPAs knowing how to do the calculation to validate that. Right. And it doesn't mean that you have to be there forever. But knowing where people's expertise are and placing them in the right space becomes so critical for all of us not to feel that, oh my gosh, I spent all this money and I, you know, running out of runways, uh, versus things can be done in the right timeline and the right steps. That's how we can move faster. And not feeling like there's too much to do and then you don't even start anywhere. This conversation can go a lot of different ways. Um, for sure because both of us are very much an ecosystem builder. Right? And the people who are ecosystem builder ah tend to be connector and knowing how to puzzle things together.

Sabrina Runback: This part of the conversation really comes down to clarity and execution. We talk about why founders lose credibility when they overcomplicate their pitch, chase too many markets at once, or fail to explain how the business actually creates measurable results. Michael ah also shared a powerful reminder that the companies winning right now are not just building faster with AI, they're solving real problems first, providing ROIs early and creating distribution before trying to scale everything at once. Now let me ask you this. Ready to impact millions of lives, not just one patient at a time. You didn't spend decades building your clinical practice or uh, healthcare ecosystem just to keep your impact confined to the exam room or to one UM organization. The future of healthcare will be shaped by the companies and leaders building the next generation of care delivery. Diagnostic, digital health, dental innovation, wellness solutions. The question is, will you be helping to shape that future or watching it happen from the sideline? At uh, our partner Health Board advisor is seeking experienced clinicians, healthcare executive operators and uh, industry leaders who want to leverage their expertise as advisors, strategic partners and uh, investors in healthcare innovation. Through our curated ecosystem, we match experts, experts with aligned healthcare companies where they can contribute insights, influence innovation, create additional income stream and building a legacy that reaches millions of lives, not just one patient at a time. Whether your goal is mentorship, advisor, uh, work board participation or investment, we would love to learn more from you to help you bring Your expertise to bringing to making better healthcare solutions to the market. Apply to be a House Board Advisor expert@healthboardadvisor.com your expertise has already changed lives. Now it's time to help shape the future of healthcare itself.

Co-host: So we definitely want to encourage everyone who's listening, uh, about tapping into ecosystem. Right. Join Gilpin, come to Healthcare Advisor. Be in different places because you're gonna get exposed to different dynamic thinkers and then you can see how all of us can continue to support you in those different rounds and all about learning and growing together. So how do people reach out to you if they wanted to meet, have a more of a conversation or figure out how they can get support from you?

Michael J. Frank: So you can. Thank you for having me on. I appreciate it. You uh, can find me at on LinkedIn Michael J Frank F R A N K and you can find us@gilderglad.com you could go watch our pods on YouTube, TikTok and Instagram for free. Come say hello. I appreciate being on. Thank you very much.

Co-host: Exactly. Go find all those amazing resources wherever you're listening to podcasts, watching and then if you're a reader, go find a public on their website and on um, their LinkedIn. We so appreciate everyone for joining us. As we wrap up, do want to hear from you. What is something that you're actively working on, uh, and building your own community that has been helping you to move so much faster. Until next time. Bye guys.

Sabrina Runback: Today's conversation with Michael exposed one of the biggest shifts founders can no longer ignore. Building a great product is no longer enough. AI is rapidly lowering the barrier to innovation, which means clarity, distribution and strategic partnership and execution are becoming the real differentiator between companies that scale and companies that disappear. We also heard from many investors who said if your company have the AI hashtags attached to you and you're only on the software part, that also means other people can replace you relatively quickly. So making sure you have something special that no one can replace. We also unpacked why so many founders struggle to gain investor traction. Not because they lack intelligence or passion, but because they over complicate their message, chase too many directions at once and fail to clearly communicate the real world problem they solve. Here are the main learning points from today's conversation. Number one, the wrong conversation will keep your startup stuck. Founders often think momentum means stay busy attending conferences, events, meetings, constantly networking. But if those conversations are happening with the wrong investor, the wrong advisor or the wrong partner, you end up creating activities without real traction. Sustainable growth happens when you intentionally build relationships with people who actually understand your vision and can help move the business forward in our ecosystem. When we are looking at supporting a startup, uh, whether it's from your overall go to market, whether you have the right co founders and the team helping you, or you are talking to investors that actually will convert into a check, we usually look at how you are doing that in a way that is easy for you, that is doable, that's repeatable so it doesn't slow down traction. Number two, AI is no longer a competitive advantage is the new baseline. The companies moving fastest today are not necessarily the biggest companies, they are the founders. Using AI to create leverage across operations, communications, research, marketing and execution. If your company is still training AIs like a future experimentation instead of a current infrastructure, you're already behind behind the founders who are integrating it daily will move faster. What does that mean? It's not just you have an AI enabled solution, but how are you using AI to create marketing materials that uh, align with your messaging every time understanding your offer and doesn't deviate because we all know every single person have a different way of interpreting results and sentences that will cause your entire marketing sales to actually fizzle out. So understanding there are guardrails that actually can help you then inserting your assistant in the process can help make him more humanized and more consistent. That's how you can have higher volume and quality at the same time. Number three, your technology is not the most anymore. AI has lowered the barrier to building product faster than ever before. What separates successful startups now? It's not just innovation, it's distribution, positioning and trust. Even the best product fails if the right audience never sees it, understands it or believe it solves a meaningful problem. So how are you going to market? It's not as easy as it sounds. Is actually understanding the entire client journey that can be helped by research and talking to the ideal client. But if you're talking to so many people that do not fit a similar mode and they're not your true ideal client means they have urgency, they're willing to spend the money, they willing to do the work with you to get their results, then you're talking to people that will never really comfort. 4. Most founders lose investors by trying to sound too smart. Many healthcare founders over complicate their pitches because they believe complexity creates credibility. In reality, investors want clarity, simplicity and confidence in execution. The founders who raise funding successfully are the ones who can explain their solution clearly define the markets that precisely and show how the business actually Creates measurable results. What does that mean for us is that uh, we actually do a leadership maximizer evaluation on um, how well you are able to work through difficulties. When you have partners, co founders, executive advisors, what's the dynamic like? Not just by you telling us, but true core. From individual mission matching to company mission to how you naturally work, what's your natural gift? Not just what later on in life that you train about. And we start looking at a physical, spiritual, psychological, mental and resilience communication plus skill set to truly predict if these founder, co founder and leadership team is meant to be building this company and uh, keep pushing forward. Well no, entrepreneurship is not a oh I'm going to build this tomorrow, I'm going to be successful. It's truly a journey. Number five, trying to serve everyone usually means you serve no one. Well. One of the fastest way founders create chaos is by chasing too many markets, too many customer types and too many opportunities at once. Especially when a founder coming to a call with me, my ask is who do you serve? You trying to tell me five different type of people or you say health system? Well there are so many different health systems and they are not all the same. If you cannot get clarity, that also means to us you don't know your market. You haven't done enough research to even understand them. And if you don't understand them, just like the previous um, four key points from today, you won't know how to talk to them. Position yourself as the must have then you become a good to have that people put on the back burner. The companies that scale sustainably understand their link deeply before expanding clarity around who you serve and how you solve the problem creates stronger execution, stronger partnership and stronger investor confidence. 6. The best startup Start by solving real problems first. Too many founders begin with a product idea instead of validating whether the market truly needs it. The strongest company starts by deeply understanding a customer problem. Solving it well means we're in healthcare, where in dental, well in wellness. Who are the true champions that are recommending these products directly to then the consumers? Because many of you are on the B2B 2C model, even you are um, on the B2B model. Then you need to do more research of each organization that you're selling to. How do they believe what needs to be done, what's the most important to them and providing measurable value early. That also means it could be like when we engage with a startup, we getting, let's say it's a pediatric solution. I'm getting 10, 20 pediatricians. In my ecosystem right away to look at the solution, to see where they can poke holes. Where do they really truly love about this product so then we can give validations and start understanding how to see it in the clinician who's going to actually recommend these solutions for you. When founders focus on, um, outcomes and ROI instead of just features, trust and traction grow much faster. So let me ask you this. Are you building a product people genuinely need or are you still trying to convince the market why they should care? Thank you for listening. Remember, the positive change we're seeking starts right here with me and you. If you are a fan of the show or if you are just having struggles or success that you either experienced in the past or are experiencing now in the healthcare industry, these matter to all of us.

Co-host: I want to hear from you.

Sabrina Runback: Visit sabrinarumbach.com connect and send me a direct message. Talk soon.