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Founders in Health Tech Talk: Building Zero to One and Beyond with Toyin Ajayi - Panel Recap

We sat down to discuss startup building from 0 to 1, and beyond with Toyin Ajayi, Co-Founder & CEO of Cityblock Health.

Early-stage founders and operators are constantly in the trenches building with no shortage of problems to tackle – from understanding growth strategies to prioritizing tasks & initiatives to managing enterprise contracts, and more. On top of that, they do it in an industry (healthcare) that is riddled with long sales cycles, fragmented infrastructure, and regulatory hurdles, just to name a few.

​We know the path from 0 to 1 is a tough one, but we think it helps to learn from those who have made the successful journey through and have reached the later stages of growth.

​To help bring the founder journey to life, Health Tech Nerds and Redesign Health hosted a panel discussion with Toyin Ajayi, MD, Co-Founder & CEO of Cityblock Health, who shared her hard-won insights and lessons learned in the early days of founding Cityblock and the path to scaling the company’s care delivery system that serves ~100,000 members across six markets today. We dug into Cityblock finding PMF, expanding into new geographic markets, building a patient-trusted care model, and navigating the many ups & downs of startups.

Our panel was moderated by Kevin O’Leary, Co-Founder & CEO of Health Tech Nerds.

Below is a summary of key takeaways from the panel discussion. 

Table of Contents

  • Getting to the Starting Line: from CCA to Sidewalk Labs

  • Key Inflection Points in Cityblock’s Early Journey

  • Approaching First Customer Contracts

  • Building in a Capital Constrained Environment

  • Evolution of Leadership, Culture, and Personal Success

  • Understanding Cityblock’s Model Across Various Markets

  • Navigating Medicaid Reimbursement Models Across States

Getting to the Starting Line: from CCA to Sidewalk Labs

As a family doctor by training, Toyin has always had a passion for serving underserved populations, which ultimately would become the foundation for starting Cityblock. However, she quickly realized that restricting herself to just clinical practice would not affect change at scale, as she had desired to do. So, she went on to join Commonwealth Care Alliance (CCA), a health plan serving dually eligible members.

“Very early in my career, I realized that seeing 20 patients a day in clinic or 16 patients a day on the inpatient hospital unit where I was admitting and discharging people with complex needs wasn't going to be fulfilling, and it probably wasn't going to change the trajectory of anyone's life meaningfully in a way that felt scalable. 

So, I took an unusual career choice to go work at a health plan because I wanted to see scale. I was also really interested to understand how we pay for healthcare and how that influences the care that people get and the experiences that they have.” 

Toyin Ajayi

During her time at CCA, Toyin had the opportunity to learn how care is financed, spend time with actuaries to dig into understanding these populations, and importantly, met one of her future co-founders, Iyah Romm. 

From CCA, the newly founded team moved to New York City to build Cityblock.

“We had the opportunity to come to New York to build Cityblock, really on the notion that we could take what we'd learned from a health plan and expand that to scale, addressing the needs of Medicaid and dually eligible populations. To do this, we needed a ton of capital, we needed the best possible talent, we needed a bigger platform to play in, so that we could do something that would change health outcomes for people for a long time to come.” 

Toyin Ajayi

Question: Can you talk about the support that Sidewalk Labs provided in the first few months of building Cityblock?

Upon arriving in NYC, Toyin recounted the experience and resources offered by Sidewalk Labs in the early days of building Cityblock. 

“We went there very certain that we wanted to build a company for Medicaid. We also went there knowing that most investors would look at us and say, “that's bonkers.” There had been no scaled venture-backed companies serving Medicaid populations because it's too hard. Those people are too complex, the margins are too thin, reimbursements are too low, churn is too high. However, the folks at Sidewalk had no prejudice about this. They weren't like the seasoned healthcare person who can tell you 50 reasons why your idea will fail before you even open your mouth. And that created space for real dialogue.

In addition, they offered us space, access to technology, technologists, and capital.”

As for how the team knew it was time to leave Sidewalk? That was a bit less clear.

“There’s a version of the story that's like, “And then we knew, and the metrics were hit, etc.” The reality is we were just figuring it out as we went along. It was messy because everything's messy.”   

Toyin Ajayi

Key Inflection Points in Cityblock’s Early Journey

Question: Now, let’s turn to thinking about going from zero to one post launch. As you look back on the journey, are there key inflection points that either changed the trajectory of the business, supercharged it to grow faster, avoided near death moments?

Toyin highlighted the pandemic as a key inflection point in Cityblock’s growth trajectory.

“I cannot overstate how dramatic and profound those first days of the pandemic were for us…You combine the physical and existential risk that people felt…It was tough…But I think one of the decisions we made was that were going to continue to see our members in person to the extent that we could, because we knew that's what they needed.

While we did a lot of work on digital tools and we really ramped up our virtual care, we still had a commitment to seeing our members in person. And that led us to build a whole new capability that now is the backbone of our 24/7 clinical response capability and what we call our mobile integrated care team that helps to avoid ED visits and acute utilization across all of our markets today.

…We grew dramatically during the pandemic, but we had to pivot our whole business model, our whole clinical model, to accommodate that growth.”

Toyin Ajayi

Another inflection point that Toyin discussed revolved around the cultural and operational changes that take place as you scale from 50 to 250 to 1000, and beyond. She highlighted a few examples below:

“We felt those shifts not only in the number of employees, but also in the number of markets we operated in. 

What does it mean for employee number 20 to no longer be in every meeting when you become a team of 200? What does it mean when someone who joined as an early employee has been doing a phenomenal job has to accept that they're going to get a new boss who's going to lead the function that they used to lead because they no longer have the skills to take it to that next level? What happens when you go through your first downsizing, where you have to close a market, where you have to make really tough choices, to say goodbye to folks that you brought into the company and have given so much? 

There are so many firsts that you go through when you build a company and every single one leaves lessons and also changes, sometimes imperceptibly, but sometimes really meaningfully, the trajectory of the business.”   

Toyin Ajayi

Approaching First Customer Contracts

Question: How did you think about going and getting those first customer contracts, what worked? Any lessons learned from those experiences when you were starting out?

Toyin emphasized the importance for startups to be solving the “right” problem when first getting a foot in the door with early customers.

“When you walk in the door for that first conversation, if the person you're pitching to doesn't put down their laptop or phone, look you in the eyes and say, “Yes, that is a problem I have today and I would like to work with you to solve that” – then you’re not talking to the right problem. 

Unfortunately, a lot of these MCOs, while they may have 15 problems, they're only going to work on two max at once. So if you're not in the top two problems that day, that week, that quarter, it's gonna be very hard to get that next conversation.

And so the question I always ask when folks say, “Oh, it's so hard to get that first contract” is, well, did you have a hard time getting in the door?”

Toyin Ajayi

Building in a Capital Constrained Environment

Question: Obviously, we've seen investment appetite change in recent years. Any reflections for founders that are building today, who are seeing investors value profitability over growth change there? How might things have changed Cityblock’s trajectory if you were trying to build in this environment today?

“I think because when we started our business, there was so much inherent skepticism about if you can make money in Medicaid that we knew we had to figure out how to make money from the start…There was no way we would get a pass having grown a big business with lots of top line revenue and no path to profitability…So the bar always felt a little bit different. 

I think it's a good thing that we're in an environment where business fundamentals are required, and I think it will force more discipline in how companies grow. I think the one place where it gets challenging is that in healthcare, particularly healthcare services…businesses are inherently capital intensive and require scale in order to achieve unit economics that make sense.

…I think there were some decisions we would make differently, like marginally. But actually, I don't think it would have profoundly changed our trajectory.”

Toyin Ajayi

Evolution of Leadership, Culture, and Personal Success 

As Cityblock Health grew, Ajayi emphasized the evolution of leadership roles and the importance of maintaining a strong company culture.

Question: How does the role of CEO change over time going from one to many? What does the role look like today? How do you conceive of it now? And how much has that changed since a year ago when you stepped into the role?

“The way that my job has shifted is that I spend my energy differently because the things that would have stretched me a year ago no longer do. For some of them I've hired people to take on. Others, I've seen enough reps that I can make the decision that much more quickly. For others, we put in place processes that require us to just fully take offline. And so I'm spending my time differently on new problems. 

…You go from the early days of figuring out is there even a thing that anyone's interested in? Then you go to, well, is there a product that a customer wants to buy? Will a health plan pick up what I'm putting down? Can I enter into the contract? Can I replicate that contract? 

And then you get into the phase of, can I actually execute on the thing I said I was going to do? How do I close the PowerPoint to reality gap that all of us face in the startup space? You can spend a long time closing that gap because the reality of what it takes to get as good at execution as you need to be to scale a business that's serving patients in any way, shape or form is a lot of debt you enter into by virtue of even signing your first contract.”

Toyin Ajayi

Question: I'm curious about how you think about culture and maintaining culture as a company grows. What are some of the ways that you try to ensure consistency in the culture of a large organization? How do you think about balancing that consistency with the autonomy of individual leaders to have some differences in culture within different teams?

“Yeah, I think a lot about this, and I think we've had a lot of learnings here. There have been moments in the business, and I'll be transparent, where we didn't always get it right. 

We spend a lot of time on our values and instilling our values…We start large meetings, company wide meetings, our monthly business reviews, with a voice of the member story that reminds us of what we're doing and why. 

…I think the place where we were slower than I would have liked to build was then you have to codify that in processes, you need to build this stuff so that it is in the fabric of the company. For example, talent reviews – what do you think about performance management and performance reviews?

…We do regular employee engagement surveys. We take that feedback really seriously. I read every single comment that comes through personally. And then as leaders, we model how the rest of the organization shows up.

This was a very personal learning – you can say all you want to say, but how you interact speaks volumes. When we as leaders are not self aware, when we're tired, when we're stressed, when we transmit that stress and that fatigue, even if we say, oh, we care about the mission and we care about the values, we're projecting something different.”

Toyin Ajayi

Question: I'd imagine for many early-stage startup founders in the room, they look at Cityblock as a success story seeing how you all have scaled. I'd be curious how your perception of success has changed across the Cityblock experience. What's it like being here? Did you think you'd be here when you started? What's the process of how you define success for yourself and perceive that?

“I think that the healthiest thing that a person can do when they're founding a company is to figure out how to divorce yourself from the things that you accomplish, in terms of your internal sense of self worth and what personal success is. So, for me, success is, do I get up every day and try as hard as I possibly can to live in accordance with my values – to do something meaningful and to treat people the way that I think everyone ought to be treated? Do I show up for myself, for my family, the things I believe in and do I work really hard for something that's meaningful. That's it.

And it seems small compared to having a business and having 1,000 employees and 100,000 members to serve. But it helps me because there are some days when I make mistakes. There are days when we don't hit the mark. And it would be very easy for that to feel like a personal failure. 

It becomes a success if you can take that, introspect, reflect, and get up and do better the next time and compel the people around you to get up and do better next time.” 

Toyin Ajayi

Understanding Cityblock’s Model Across Various Markets

Question: How does your model/product look different across the different marketplaces that you operate in, particularly given you offer wrap around services? How do you think about approaching offerings like transportation, food access, etc. differently across these markets?

“The reality is, whether you are a Cityblock member in Crown Heights, New York, or in Fort Wayne, Indiana, or in Chicago, Illinois, you need somebody to find you, who cares about you, who sounds like you, comes from your community, who is able to engender your trust, who is able to figure out what's going on for you and your health needs. And you probably need better primary care or more access to it, better mental health or more access to it and support in accessing social services. And so that's the kind of the core chassis of our care model, but the deployment of it actually looks very similar from market to market. 

What looks different is the ‘who’. We hire people from the communities we serve who will reflect the demographics and the lived experiences of the communities we serve. 

On the social services and network side, we build bespoke partnerships in every community. But again, we're all humans. We need food, we need a safe place to sleep, we need social support, we need transportation to our doctor's appointments, and we need a source of income. Those are the same needs. We just have to meet them slightly differently depending on where we are in the market.”

Toyin Ajayi 

Question: Given the variants between Medicaid across states, how have you thought about the reimbursement from state to state? How does that impact your services across the state markets?

“There certainly are nuances, but I think what helps with our business model is that we do not bill fee for service. So, if the rate card looks different in Minnesota from New York, it actually doesn't impact us that much. We're working directly with a managed care plan, with a health plan, and negotiating a fixed rate, a total PMPM for the full population. So we're taking full cap risk that is tied to the total cost of care for that population.

We do have to grapple with different risk adjustment methodologies, provider networks are different, some of the social benefits that are covered or not covered vary from state to state. Licensure is a big deal, scope of practice, things like that are different from state to state. But, the underlying economics of a business actually looks remarkably consistent given how heterogeneous Medicaid can be.”

Toyin Ajayi

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