20VC Why CEOs Must Read Less & Listen Less, What VC Funding, Shelf Space & Time Have In Common & Why CEOs Must Look After Themselves Like Athletes with Sami Inkinen, Founder @ Virta Health & Trulia

Summary Notes


In this episode of the 20 minutes VC, host Harry Stebbings interviews Virta Health founder and CEO, Sami Inkinen, who shares his journey from a Finnish farm to Silicon Valley, detailing his experiences from co-founding Trulia to tackling type two diabetes with Virta Health. Inkinen emphasizes the importance of learning from success, managing one's mental and physical health like an athlete, and maintaining focus and discipline in both business operations and personal life. He also discusses the nuances of fundraising, advocating for raising only as much capital as needed and ensuring a strong business foundation over tactics. Inkinen's unique perspective on entrepreneurship, health, and leadership underlines the episode, providing insights into the mindset and strategies that drive successful startups.

Summary Notes

Introduction to Sammy Inkinen and Virta Health

  • Sammy Inkinen is the founder and CEO of Virta Health, a startup aiming to reverse type 2 diabetes in 100 million people by 2025.
  • Virta Health has raised over $35 million from notable investors, including S. Levchin, EV Williams, PayPal, Ray Thompson, and Bob Kocher.
  • Sammy has a background as co-founder, COO, and president of Trulia, which went public and sold for $3.6 billion.
  • He is a triathlon world champion and has rowed across the Pacific Ocean to raise awareness for healthy nutrition.
  • Max Levchin facilitated the introduction for Sammy to appear on the 20 minutes VC podcast.

"I'm thrilled to welcome Sammy Inkinen, founder and CEO at Virta Health, the startup on a mission to reverse type two diabetes for a hundred million people by 2025, and they've raised over 35 million in funding from the likes of previous guests S. Levchin, EV Williams's obvious ventures, PayPal, Ray Thompson at Caffeinated Capital and previous 20 VC guests Bob Kocher at Venroc."

This quote introduces Sammy Inkinen, his company Virta Health, and their ambitious mission, as well as highlighting the significant funding and support from high-profile investors.

Sammy's Background and Entry into Startups

  • Sammy grew up on a farm in Finland, far from the startup ecosystem.
  • His interest in technology began with his first computer, a Commodore 64, and running one of the first BBS in Finland.
  • Joined an online stock broker startup in Finland as one of the first ten employees and witnessed its growth to IPO in two years.
  • Founded his first software company in Finland, which was sold in 2002, providing a valuable life experience.
  • Moved to Silicon Valley after being accepted to Stanford University for grad school.
  • Co-founded Trulia in 2004 with a classmate, which went public in 2012 and merged with Zillow in 2014.
  • Started Virta Health after personally discovering that type 2 diabetes could potentially be reversed, feeling a duty to address this significant health issue.

"I grew up on a farm in Finland, so very far from any kind of startups. And what got me into computers, and I guess excited about building something for people to use, was my very first computer, Commodore 64."

Sammy explains his early life on a farm in Finland and how his interest in technology and building for others began with his first computer.

The Journey from Trulia to Virta Health

  • After Trulia's IPO, Sammy intended only to advise and invest in other entrepreneurs.
  • Personal health problems led him to discover the potential to reverse type 2 diabetes, inspiring him to start Virta Health.
  • Virta Health was co-founded by Sammy in 2017 with the mission to reverse type 2 diabetes in 100 million people by 2025.

"So how did I got into Verda? I actually have to admit that after truly IPo, I thought I'd be just advising and investing in other entrepreneurs, but completely accidentally, around 20, 12, 13, through personal health problems that I had, I discovered that this quite horrible and irreversible disease called type two diabetes could actually be cured."

Sammy shares his unexpected journey from planning to be an advisor and investor post-Trulia IPO to founding Virta Health due to a personal health revelation.

Success vs. Failure

  • Sammy believes that success is often more educational than failure due to the longer duration and more experiences to learn from in successful ventures.
  • He suggests that successful ventures allow for more reflection and understanding of what actions led to positive outcomes, compared to the often shorter lifespan of failed attempts.

"But I do think that you learn much more from a successful venture for a number of reasons. First of all, I think successful ventures usually last longer, so you simply have more time and more experiences to learn from, versus often a faster failed attempt."

Sammy argues that success provides a broader and longer-term range of experiences from which to learn, making it potentially more valuable than learning from failure.## Probability of Success

  • Repeating successful actions increases the likelihood of future success.
  • Learning from past successes can build self-belief and confidence.
  • Confidence gained from success helps overcome barriers and achieve significant goals, like raising capital or recruiting.

If you've never done one, it might seem like a near mission impossible, but after you've done your first marathon run and you finished it, it's actually pretty easy to just repeat it.

This quote illustrates the power of firsthand success in transforming a daunting task into something manageable, using the metaphor of running a marathon to highlight the self-confidence that comes with achievement.

CEO's Focus and Knowledge Management

  • CEOs should avoid getting bogged down in excessive details of the business.
  • The brain is likened to a cup with finite capacity, emphasizing the importance of prioritizing what to focus on.
  • CEOs should concentrate on major issues: cash, strategy, and people, rather than all the small problems of the team.
  • Empathizing too much with team problems can lead to stress and distraction from bigger picture thinking.

And as a CEO and founder, most likely you should be thinking about the really big stuff.

Sammy Inkinen suggests that CEOs need to prioritize their mental capacity for strategic thinking and crucial business aspects, rather than getting lost in the minutiae of daily operations.

Company Operating System

  • Even with minimal infrastructure, a basic operating system is essential for scaling a company.
  • This includes establishing meeting schedules, communication protocols, and prioritization methods.
  • A well-designed operating system allows for managing teams based on outcomes and metrics, not minutiae.
  • The operating system should be simple yet effective in supporting the company's growth.

So the operating system can be pretty simple.

Sammy Inkinen emphasizes that a company doesn't need complex infrastructure to succeed, but it does need a fundamental operating system to guide its operations and maintain focus on outcomes.

Fundraising Strategy

  • Raising too much money can lead to waste and a lack of focus.
  • It's important to develop a discipline of prioritization and efficient resource use early on.
  • Over-fundraising brings risks like overvaluation and the challenge of delivering ROI.
  • Capital should be viewed as a mortgage that needs to be repaid, encouraging responsible use of funds.
  • A strong product-market fit and a clear growth strategy are prerequisites for raising significant capital.

No company is ever going to operate in an unlimited resource world.

Sammy Inkinen warns against the dangers of having too much funding, advocating for a disciplined approach to resource management that ensures long-term sustainability and success.## Capital Raising Strategies

  • Entrepreneurs should raise the amount of capital needed to reach milestones justifying their company's valuation.
  • Biotech is an example where massive funding is necessary for drug development.
  • Despite needing funds, entrepreneurs should maintain frugality and prioritize effectively.
  • Raising large capital is likened to a mortgage that needs to be repaid, emphasizing the importance of confidence in creating value.

"You should raise the amount of capital that you need to achieve the milestones which will justify the valuation for your company."

This quote highlights the importance of raising only as much capital as necessary to reach specific business milestones that support the company's valuation.

"There are situations where you absolutely, totally need that capital."

Sammy Inkinen acknowledges that in certain industries like biotech, substantial funding is absolutely critical for product development.

"It is a mortgage, you have to pay it back."

The quote draws a parallel between raising capital and taking out a mortgage, emphasizing the obligation to generate returns on the investment.

Fundraising Insights

  • Focus on building a great company with a strong team and solid results to naturally attract funding.
  • Fundraising requires clarity about when you are actively seeking funds and when you are not.
  • Preparation of materials and references in advance can streamline the fundraising process and maintain momentum.
  • Early-stage fundraising involves considering the combination of capital, governance, and advice, often from a single source.
  • Spending time with potential investors who will likely join the board is crucial in early stages.

"Great companies with great teams and great results, they will practically always find funding."

This quote suggests that the fundamentals of a strong company, team, and performance are the most critical elements in attracting investment.

"You want to be very clear when you're fundraising and when you're not."

Sammy Inkinen emphasizes the importance of strategic timing and clear distinctions in the fundraising process.

"How do I think of capital, governance and advice?"

The question posed by Sammy Inkinen encourages entrepreneurs to consider the multifaceted role of investors in early-stage companies beyond just providing funds.

CEO Self-Care

  • CEOs should manage their health and well-being as meticulously as professional athletes.
  • Overworking and lack of rest can lead to suboptimal performance and health issues.
  • Optimal performance in leadership roles requires creativity, strategic thinking, and full awareness.
  • Working tirelessly without adequate rest is compared to low-value tasks and does not contribute to high-level value creation.

"If you are in any kind of a startup leadership role, that 100% of the time you have to be able to be creative and strategic and fully aware of what's happening."

Sammy Inkinen stresses the need for CEOs to be consistently at their peak performance to fulfill their roles effectively.

"That kind of grinding through stuff, tired and half sleep, that's basically a $10 an hour job."

The quote criticizes the practice of working while exhausted, likening it to low-value labor that does not leverage a CEO's capabilities.

Personal Health and Performance Tips

  • Prioritize sleep as a fundamental performance enhancer.
  • Reduce sugar and excessive carbohydrate intake for better health.
  • Engage in interests outside of work to provide mental breaks and manage stress.
  • Avoid multitasking, even with family, to maintain focus and effectiveness.
  • Recognize that the body responds to all stress similarly and manage it through periods of rest and heavy focus.

"Sleep is the best performance enhancing drug before you start taking stimulants like caffeine and whatnot."

Sammy Inkinen advocates for the importance of sleep over stimulants for maintaining high performance.

"It's very important to realize that your body reacts to all kinds of stress the same way."

The quote underscores the need for CEOs to manage different types of stress in a holistic manner, similar to how athletes manage their training and recovery.## Inspiration from Literature

  • Sammy Inkinen was inspired by Laura Hillebrandt's book "Unbroken" to row across the Pacific Ocean with his wife.
  • The journey took 45 days and 3 hours, and they remained married after the experience.
  • The book "Unbroken" encompasses themes of perseverance, resilience, grit, and the extents of human possibility, which are valuable to entrepreneurs.
  • It also imparts lessons on forgiveness and kindness.

My current favorite book is the Laura Hillebrandt's Unbroken, and the reason it's most important or most influential to me is a couple of reasons. One, it was a book that inspired me to row across the Pacific Ocean completely unsupported with my wife, which for the record, took 45 days, 3 hours.

This quote explains the significant impact that the book "Unbroken" had on Sammy Inkinen, inspiring him to undertake a challenging and lengthy ocean rowing adventure with his wife.

The Entrepreneurial Environment in Venture Capital

  • Being an entrepreneur-in-residence (eir) in a venture capital (VC) environment can hinder the development of unconventional ideas due to the pressure of logical reasoning from smart, successful people.
  • Sammy believes that being slightly crazy and contrarian is necessary for entrepreneurial success, which may not be fostered in a VC setting.

Well, my viewpoint is that, first of all, in any VC venture capitalist environment, you're surrounded by extremely thoughtful and extremely smart people who can poke holes into any idea that's not completely logical.

Sammy Inkinen expresses his view that the VC environment, while intellectually stimulating, might suppress the unconventional thinking required for entrepreneurial innovation.

Misconceptions About Obesity and Type 2 Diabetes

  • Sammy Inkinen challenges the notion that obesity and type 2 diabetes are due to a lack of willpower or personal fault.
  • He attributes the epidemic to bad science, recommendations, therapies, and an unhealthy food environment.

Obesity and type two diabetes epidemic has actually nothing to do with lack of willpower? Or that all these obese and diabetic people can only blame themselves for their condition.

Sammy Inkinen refutes the common belief that obesity and diabetes are solely a result of personal failure, pointing instead to systemic issues in science and food production.

Consumption of Media and Information

  • Sammy has become less interested in blogs due to their often one-sided perspectives, which require significant energy to critically assess.
  • He prefers the podcast "Intelligence Squared" for its balanced debates featuring world-class experts, providing a 360-degree view on topics.

I've become a huge fan of this podcast, intelligence squared, because you'll always hear from two or four world class experts who debate both sides of the topic.

This quote highlights Sammy Inkinen's appreciation for the podcast "Intelligence Squared," which he values for its comprehensive and balanced discussions on various subjects.

Angel Investing and Startup Realities

  • Sammy has observed many startups and pitches, realizing that the likelihood of massive success is much lower than most founders anticipate.
  • He emphasizes the importance of having a deep, personal motivation ("super deep why") for starting a company, which is often lacking among founders.

The probability of a massive success early on is several orders of magnitude less than most founders think about it, it's almost like first crater playing football and hoping to get to NFL.

Sammy Inkinen points out the unrealistic expectations of startup founders regarding their chances of significant success, likening it to a child aspiring to reach the NFL.

Personal and Professional Future

  • Sammy strives to be a good father and husband while working hard in his personal life.
  • He envisions a future where the work of his company, Verta, in transforming healthcare, particularly in curing diabetes, will be recognized as obvious and groundbreaking.

In five years, I think the rest of the world will finally go from, no way, guys. That's impossible. You guys are crazy. To more something like, wait a second, that's totally obvious. That's how you cure diabetes.

Sammy Inkinen shares his hope that in five years, the innovative approach of his company, Verta, will shift from being seen as impossible to being universally accepted as the obvious solution to curing diabetes.

Acknowledgements and Support Systems

  • Harry Stebbings expresses gratitude to Sammy for his participation in the show and looks forward to Verta's future.
  • The host acknowledges the introduction by Max Levchin and promotes behind-the-scenes content on Snapchat.
  • The importance of infrastructure and support systems for early-stage startups is emphasized, with First Republic Bank being highlighted for its resources and network.
  • Segment is recommended for its comprehensive data integration platform, used by leading companies for growth and revenue.

And if you'd like to see more from us behind the scenes at the 20 minutes vc, you can on at Hdebings with two B's on Snapchat.

Harry Stebbings invites listeners to engage with behind-the-scenes content on Snapchat, providing an opportunity to connect with the show's community.

First Republic's resources, network and expertise allow entrepreneurs to customize a solid foundation for your business across all stages.

Harry Stebbings endorses First Republic Bank for its ability to support entrepreneurs with a strong foundation and network for their businesses.

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